IFA Brochure

Step 1: Active Investors Step 2: Nobel Laureates Step 3: Stock Pickers Step 4: Time Pickers

Step 5: Manager Pickers Step 6: Style Drifters Step 7: Silent Partners Step 8: Riskese

Step 9: History Step 10: Risk Capacity Step 11: Risk Exposure Step 12: Invest and Relax

1 IFA | 12-Step Brochure TABLE OF CONTENTS

About IFA 3

IFA Fiduciary Wealth Services 4

The Value of a Passive Advisor 5

IFA’s Investment Philosophy 6

Step 1: Active Investors 7

Step 2: Nobel Laureates 8

Step 3: Stock Pickers 9

Step 4: Time Pickers 10

Step 5: Manager Pickers ...... 11

Step 6: Style Drifters 12

Step 7: Silent Partners 13

Step 8: Riskese 14

Step 9: History 15

Step 10: Risk Capacity 16

Step 11: Risk Exposure 17

Step 12: Invest and Relax 18

IFA Index Portfolios 19

IFA Index Portfolio 100, 75, 50, 25 Fact Sheets 20-27

Disclosure for Charts & References i

Disclosure for the Hypothetical Back-Tested Performance of Model IFA Index Portfolios and Indexes ii-iv

Index Descriptions v-xiv

Index Fund Advisors, Inc. V. 8-2020 2 ABOUT IFA

Index Fund Advisors, Inc. (IFA) is a fee-only wealth The value of IFA extends beyond superior investment management firm that provides risk-appropriate, advice. As a holistic financial partner, IFA helps guide returns-optimized, globally-diversified and tax- investors through life and retirement stages. Our Wealth managed investment strategies with a fiduciary Advisors take a personalized approach to matching standard of care. people with portfolios while providing a full-range of wealth services for a better overall client experience. Founded in 1999, IFA is a Registered Investment Adviser that provides fiduciary wealth management services to Through its IFA Taxes division, IFA provides individuals, individuals, trusts, corporations, non-profits, and public businesses, trusts and non-profit entities across the and private institutions. Based in Irvine, California, United States a wide range of tax planning, tax preparation IFA manages individual and institutional accounts, and accounting services.* including IRA, 401(k), 403(b), profit sharing, pensions, endowments and all other investment accounts. IFA For updates and further information, visit ifa.com. also facilitates IRA rollovers from 401(k)s and 403(b) *IFA Taxes does not provide auditing or attestation services and therefore is s. As of December 31, 2019 more than 2,400 clients not a licensed CPA firm. IRS Circular 230 Disclosure: To ensure compliance nationally entrusted approximately $4.08 billion of their with requirements imposed by the IRS, we inform you that any U.S. Federal tax advice contained in this communication is not intended or written to be assets to IFA’s care. used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter herein.

20 Years, 10 Months (3/1/1999 - 12/31/2019 $4.08B $4.0B $3.84B $3.60B $3.5B $3.08B $3.0B $2.66B $2.74B $2.5B $2.23B AUM $2.0B $1.73B $1.44B $1.5B $1.33B $1.04B $1.03B $1.0B $703M $812M $355M $500M $175M$260M $6M $35M $55M $80M $0 1999* 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 *IFA was Founded in 1999 Year Ending

Past performance does not guarantee future results. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal.

3 IFA | 12-Step Brochure IFA FIDUCIARY WEALTH SERVICES

IFA combines personalized advice with customized wealth articles and videos, tax planning and tax preparation, management services to assist our clients in achieving an automatic annual glide path de-risking option, tax- their long-term financial goals. These services are listed loss harvesting, detailed financial planning, monthly below and include: educational wealth management performance reporting and much more…

FIDUCIARY WEALTH SERVICES

WEALTH MANAGEMENT ACCOUNTING IFA provides investment advisory services IFA Taxes provides collaborative tax advice, that focus specifically on matching people tax planning, accounting, bookkeeping with portfolios of passively managed or and tax return services to individuals and index mutual funds, based on the client’s business entities across the United States. risk capacity. SOCIAL SECURITY FINANCIAL PLANNING OPTIMIZATION SERVICES IFA offers robust financial planning utilizing IFA Wealth Advisors and expert resources eMoney to provide a complimentary, wealth provide a powerful solution to determine management system that will allow our how to maximize your social security clients to track their assets, liabilities, income, benefits and further outline your complete and spending across all their accounts as financial picture. well as store all their important documents. CHARITABLE GIVING SERVICES RETIREMENT PLANNING IFA Wealth Advisors assist clients in setting With the aid of the IFA Retirement Plan up donor advised funds, which are charitable Analyzer, IFA Wealth Advisors are able to giving accounts that provide an efficient way help clients make more informed decisions to make grants to charities. in each stage of retirement. LENDING SERVICES COLLEGE PLANNING IFA Wealth Advisors can assist clients in IFA’s College Savings Analyzer helps IFA accessing various lending solutions that Wealth Advisors align a client’s college are secured by the client’s portfolio. These funding objectives with an appropriate solutions include pledged lines of credit, college savings and investment plan. non-purpose loans and margin loans through Charles Schwab and Fidelity.

REFERRAL SERVICES

INSURANCE TRUSTEE ESTATE PLANNING SERVICES SERVICES SERVICES

Index Fund Advisors, Inc. 4 THE VALUE OF A PASSIVE ADVISOR

As low-cost index fund investing continues to gain in A knowledgeable passive advisor can provide several popularity, numerous researchers have turned their services, including the critical discipline needed to attention to quantifying the value a passive advisor can combat emotional, reflex reactions. When advice bring to an index portfolio. One such study conducted is combined with funds from DFA, a science-based by Vanguard, the leading provider of index funds passive fund company, investors avail themselves quantified the “advisor alpha.” This advisor alpha is the of the opportunity to keep more of what the market sum of the value added by advisors who adhere to the delivers. principles of controlling costs, maintaining discipline and tax awareness, relative to other advisors or unadvised IFA analyzed the performance of 533 clients who had investors. The greatest contribution a passive advisor been working with our advisors for at least 11 years brings is behavioral coaching, according to the study — from 2008 through 2018. This period included the or as William Bernstein so succinctly puts it: “Wall Street decline of equities during the global financial crisis is littered with the bones of those who knew just what of 2008 and early 2009, as well as the subsequent to do, but could not bring themselves to do it.” The recovery period. Even though many of these clients breakdown of the advisor alpha set forth in Vanguard’s had inception dates prior to Jan. 1, 2008, we chose 2014 & 2018 studies are shown below. this time period so that each investor would have experienced the same market conditions. For each of Breakdown of Vanguard Advisor's Alpha the 100 benchmark IFA Index Portfolios, our research 2014 2018 Implementation with Cost-Effective Funds 0.45% 0.34% team maintains monthly historical returns that can Disciplined Rebalancing 0.35% 0.26% be used to benchmark clients’ time-weighted returns. Behavioral Coaching 1.50% 1.50% IFA determined the annualized returns of the clients’ Asset Location 0-0.75% 0-0.75% index portfolios and compared that to the original Annual Withdrawal Strategy 0-0.70% 0-1.10% recommended IFA Index Portfolio. The clients were Determining an Appropriate Asset Allocation Not Quantified Not Quantified divided into three groups based on how closely they Total Return Investing vs. Reaching for Yield Not Quantified Not Quantified followed IFA’s advice. The results of the study are Source: Francis M. Kinniry Jr., Colleen M. Jaconetti, Michael A. DiJoseph, Yan Zilbering, and Donald G. Bennyhoff, 2019. Putting a value on your value: Quantifying illustrated in the chart below. Vanguard Advisor’s Alpha. Valley Forge, Pa.: The Vanguard Group “Putting a Value on Your Value: Quantifying Vanguard Advisor’s Alpha”, Vanguard Research, 2014.

IFA Client Success at Capturing Benchmark Index Returns 11 Years (1/1/2008 to 12/31/2018) Client’s Average Percentage of Benchmark Annualized Returns

100.32% 82.35% 77.93%

Clients that Did Follow Clients that Clients that Did Not Follow IFA's Advice Recalibrated IFA's Advice Average of 209 clients that kept Average of 163 clients that decreased Average of 161 clients that either decreased within 9 risk levels of IFA’s original their risk level by 10 to 25 compared to their risk level by more than 25 or increased recommendation IFA’s original recommendation by more than 10 compared to IFA's original recommendation Source: Internal analysis of 533 portfolios of IFA clients that were clients as of 1/1/2008 and stayed through 12/31/2018. Returns calculated as annualized returns. The benchmark is IFA’s recommended IFA Index Portfolio at the beginning of the client relationship. All client index portfolios were evaluated for that 11-year period, which we consider to be a difficult period because it includes a steep drop followed by a full recovery. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantees investment strategies will be successful. Investing involves risks, including possible loss of principal. IFA Index Portfolios are recommended based on an investor’s risk capacity, which considers their time horizon, attitude towards risk, net worth, income, and investment knowledge. Take the IFA Risk Capacity Survey to determine which index portfolio matches your risk capacity.

5 IFA | 12-Step Brochure IFA’S INVESTMENT PHILOSOPHY

IFA’s evidence-based, passive investment strategy is IFA utilizes the following five investment tenets derived designed to capture the returns of the global markets, from academic research, much of which has been with the goal of keeping fees low. IFA’s investment recognized with the awarding of the Nobel Prize in philosophy and subsequent portfolio implementation Economic Sciences: maximizes global diversification while capturing exposures to the asset class and sub-asset class indexes that have a long history of rewarding investors for risks 1) FINANCIAL MARKETS ARE EFFICIENT taken. Specifically, IFA’s philosophy is guided by long- As free market prices fully incorporate available term historical data, avoiding attempts to outsmart information, price change consequently reflects the market through timing, style selection, or paying unexpected new information; therefore the current the high prices associated with active management. price is the best estimate of a fair price. These destructive behaviors simply erode the returns the market provides patient investors who focus instead on appropriate asset allocation and portfolio 2) RISK AND RETURN ARE INSEPARABLE Although there is no such thing as return without risk, implementation. IFA avoids the futile, speculative, and not all risks are equally rewarded. Long-term historical unnecessary cost-generating activities of stock, time, risk and return data informs IFA’s investment selection manager, and style picking. Contrarily, IFA employs process, and IFA’s Index Portfolios seek to capture a disciplined, quantitative approach that emphasizes the historical risk factors that have appropriately broad diversification and consistent exposure to the compensated investors for risks taken, including structural trends of global publicly-traded markets. market, size, value, and profitability for equity and term and default for fixed income. IFA’s investment philosophy is rooted in Nobel Prize- winning research. Notably, IFA’s strategy is guided by The Efficient Market Hypothesis and Modern Portfolio 3) DIVERSIFICATION IS ESSENTIAL Theory. IFA bases its portfolio construction on the Diversification within and among asset classes lets highly respected research indexes designed by Nobel investors effectively capture the returns offered by the Laureate Eugene Fama and his associate Kenneth financial markets, in accordance with their risk capacity. French, incorporating more than 92 years of IFA Index Portfolio risk and return data and third generation 4) STRUCTURE EXPLAINS PERFORMANCE index fund designs. The expected return of a diversified portfolio is determined by its exposure to the compensated risk IFA matches people with portfolios by carefully qualifying factors, therefore the high costs and risks of active and quantifying five dimensions of an investor’s management are unnecessary and potentially harmful risk capacity and matching it to five dimensions of to an investor’s long-term outlook. a portfolio’s risk exposure. IFA obtains academically identified capital market rates of returns for our clients from approximately 13,000 public companies in the 5) ADVISOR ADVANTAGE U.S. and approximately 45 other countries globally. We There are distinct benefits to enlisting the services design highly tax-managed, low cost trading strategies, of a passively-oriented advisor, including disciplined maintaining proper risk exposures through rebalancing. rebalancing, tax loss harvesting, asset location, and glide path.

Index Fund Advisors, Inc. 6 STEP 1: ACTIVE INVESTORS Recognize an Active Investor

Active investing is a strategy that investors use when The chart below tells the story. It reflects the findings of a trying to beat a market or appropriate benchmark. 2020 Dalbar study, revealing that the average equity fund Active investors rely on speculation about short-term investor significantly underperformed the IFA SP 500 Index future market movements. They commonly engage in (A tracking index for S&P 500®) and IFA Index Portfolio 100 picking stocks, times, managers, or investment styles. over a 20-year period. The study shows that during the 20 years from 2000 through 2019, the average equity fund These self-defeating practices of active investors investor earned returns of only 4.25% per year, while the unnecessarily increase their risk, expenses, taxes, and IFA SP 500 returned 6.02%. This means that the average anxiety. Most importantly, the sport of speculation equity fund investor grew a $100,000 investment to deprives investors of the returns they could earn if $229,891, while the growth of $100,000 invested in the they would simply buy and hold a passively managed IFA SP 500 would have been $321,929. Even better, we see blend of globally diversified index funds matched to that a simulated passive investor who owned IFA’s Index their risk capacity. Portfolio 100, an all-equity, small-value-tilted, globally diversified index portfolio, would have grown a $100,000 investment to $468,894 over the same 20-year period.1

The Dalbar Study: 20 Years of Average Equity Fund Investor vs. Indexes 20 Years (1/1/2000 - 12/31/2019) 10

8 6 8.03% 4 6.02% Average 2 4.25%

Annualized Return 2.14% 0 Inflation Average Equity IFA SP 500 Global Equity Fund Investor SP Index IFA Index Portfolio 100

500k

400k $468,894 300k

200k $321,929

100k $229,891

Growth of $100,000 $152,727 0 Inflation Average Equity IFA SP 500 Global Equity Fund Investor SP Index IFA Index Portfolio 100

Average Equity Investor as determined by Dalbar | Study sources, Dalbar 2020 QAIB Study, Morningstar, Inc. IFA Index Portfolios were created in 2000 and use hypothetical back-tested performance, please see Appendix for IFA Index Portfolio Data. The use of the IFA SP 500 Index is for illustrative purposes only, please see Appendix for additional information. Past performance does not guarantee future results. Data is provided for illustrative purposes only, it does not represent actual performance of any IFA client portfolio or account and it should not be interpreted as an indication of such performance.

7 IFA | 12-Step Brochure STEP 2: NOBEL LAUREATES Defer to the Higher Knowledge of Academia

Active investors disregard some of history’s most important and researchers regarding risk, probability theory, statistics, lessons. Most do not read the peer-reviewed academic the random nature of prices and asset-pricing theory have studies and Nobel Prize-winning economic research been painstakingly studied, analyzed and summarized by available. They instead rely on media messages to guide the legends of financial science, some of whom are depicted their investing decisions, largely unaware of the fact that below. Collectively, these great minds have delivered to us media outlets profit handsomely from the advertising a method of investing that is founded on the principles dollars of online brokers, trading services and active trader of market efficiency, the returns of capital markets, and publications that encourage us to trade. Nearly 300 years the “Invisible Hand” which guides market forces, prices, of statistical, scientific and economic research explain why allocation of resources, the cost of capital, and the returns investors who buy, hold and rebalance an investment in of capitalism. Investing according to the findings of these global capitalism reap rewards in proportion to the risks legends enables you to be a better investor. they take. Three centuries of study from notable scientists

Blaise Pascal Adam Smith Louis Bachelier Harry Markowitz William Sharpe

Merton Miller Friedrich von Hayek Paul Samuelson Eugene Fama Kenneth French

David Booth Rex Sinquefield John Bogle Burton Malkiel Michael Jensen

Index Fund Advisors, Inc. 8 STEP 3: STOCK PICKERS Accept That Stock Pickers Do Not Beat the Market

The financial press largely focuses on the daily movements luck, not skill. Professors Laurent Barras, Olivier Scaillet and of stocks and markets, showering rewards on those who are Russell Wermers conducted a study2 of 2,076 mutual fund lucky enough to be in the right place at the right time. But managers over a 32-year period. They found that from 1975 it is virtually impossible for a stock picking fund manager – 2006, 99.40% of these managers displayed no evidence of or individual stock picking investor to consistently predict stock picking skill. In another study, the S&P Indices Versus and invest in the stocks that will be future winners, based Active (SPIVA) Scorecard revealed that a large percentage on the tenets of market efficiency. Stock pickers tend to be of U.S. and International active funds underperformed overly confident in their “skill” to generate alpha (defined as their respective benchmarks for a 15-year period ending any return above the benchmark return), but studies have December 31, 2019. Highlights of the SPIVA study are shown shown that their “winning performance” is usually due to in the chart below.

Active Funds Versus Their Benchmarks: U.S. Equity and International Equity Funds 15 Years (1/1/2005 - 12/31/2019) | Net-of-Fee U.S. Equity Funds All Domes�c Funds All Large-Cap Funds

Percentage of Funds That Outperformed Their Respec�ve Benchmarks Percentage of Funds That Underperformed 87.76%89.10% 90.46% Their Respec�ve Benchmarks

All Mid-Cap Funds All Small-Cap Funds All Mul�-Cap Funds Real Estate Funds

88.27% 89.08% 90.21% 83.10%

Interna�onal Funds Global Funds Interna�onal Funds Int’l Small-Cap Funds Emerging Market Funds

83.16% 90.39% 68.42% 90.57%

Source: S&P Dow Jones Indices LLC, eVestment Alliance. Past performance is no guarantee of future results. Indexes are not available for direct investment and performance does not reflect expenses of an actual portfolio. Chart is provided for illustrative purposes. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantees investment strategies will be successful. Investing involves risks, including possible loss of principal.

9 IFA | 12-Step Brochure STEP 4: TIME PICKERS Accept That Time Pickers Cannot Time the Market

Time pickers (market timers) mistakenly believe they can correct 74% of the time in order to outperform a passive predict the future movement of the stock market, moving portfolio at a comparable level of risk.3 In 1992, SEI Corporation into the market before it goes up and getting out before updated Sharpe’s study to include the average 9.4% stock it goes down. Such decisions usually do not fare well, return from the period 1901 – 1990. This study determined because they are based on the fallacy that the direction of that gurus must be right at least 69% of the time.4 future price movements can be predicted. At any point in time, any investor can only know the current and past price CXO Advisory Group tracked public forecasts of self- of any given security. Nonetheless, market timing can be proclaimed market timing “gurus.” The chart below shows alluring, likely because investors don’t understand that the the percentage grades of 28 market timers who had made market continuously sets prices in response to news, which more than 100 forescasts from 2000 through 2012. The is unpredictable. study shows that not one of the “gurus” was able to meet Sharpe’s requirement of 74% accuracy, or SEI’s minimum In a study titled, “Likely Gains from Market Timing,” Nobel 69%, thereby failing to delivery accuracy sufficient to beat a Laureate William Sharpe concluded a market timer must be simple index portfolio.5

Sources: *William F. Sharpe “Likely Gains From Market Timing,” Financial Analysts Journal, March/April 1975 **CXO Advisory, Limited to 28 Market Gurus with more than 100 Forecasts for the period ending Dec. 31, 2012, www.cxoadvisory.com/gurus/ Copyright: CXO Advisory Group LLC: Reproduced with permission;

This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal.

Index Fund Advisors, Inc. 10 STEP 4: TIME PICKERS STEP 5: MANAGER PICKERS Accept That Time Pickers Cannot Time the Market Realize That Winning Managers Were Just Lucky

Active investors unnecessarily increase their risk, expenses, Selection and Termination of Investment Management taxes, and anxiety. Numerous studies have shown actively Firms by Plan Sponsors,” reveals the negative impact of managed investments generally carry more risk and manager picking. The results of hiring 8,755 managers lower returns than globally diversified, risk-calibrated shown below, illustrate that during the 10-year period index portfolios. Despite this fact, investors frequently fall from 1994 through 2003, managers that were hired had prey to the allure of past winners, hiring the hottest new outperformed their benchmarks by 2.91% over the three fund managers only to fire them later because their past years before being hired. However, over the following three performance doesn’t persist in subsequent periods. years the managers underperformed their benchmarks by 0.47% per year. Plan sponsors often proceeded to fire A 10-year study conducted by Amit Goyal of Emory their underperforming managers in favor of other recent University and Sunil Wahal of Arizona State University top performers, only to repeat the cycle again. The study found that manager hiring and firing decisions made concluded, “In light of such large transaction costs and by consultants, board members and trustees were a positive opportunity costs, our results suggest that the complete waste of time and money. The study, “The termination and selection of investment managers is an exercise that is costly to plan beneficiaries.”6

The bar chart reflects the results of the study minus an estimated annual 0.5% management fee and an annual 0.5% cost of transition in the after hiring manager returns. | Source: Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” The Journal of Finance, Volume LXIII, No. 4, published August 2008. Past performance does not guarantee future results. All data, including performance data, is provided for illustrative purposes only, it does not represent actual performance of any client portfolio or account and it should not be interpreted as an indication of such performance.

11 IFA | 12-Step Brochure STEP 6: STYLE DRIFTERS Comprehend Active Management Style Drift

Style drift occurs when an active manager drifts from a the 38-year period from 1982 to 2019, Magellan morphed specific style, asset class or index that is described as the and evolved several times. For example, in mid-1995, the stated investment purpose of a fund. Style drift is a serious fund looked like a large value fund, despite the fact that its problem for investors who believe they are invested in a benchmark was the large blend S&P 500. portfolio that matches their risk capacity. Since managers of active funds seek to outperform the benchmark, they often In contrast to the style drifting tendencies of actively wander outside the boundaries of the benchmark, altering managed funds like Fidelity’s Magellan, passively managed the fund’s exposure to risk and its volatility of returns. funds (specifically those provided by DFA) adhere to strict rules of construction and are held constant regardless One particularly egregious example of style drift is the of market conditions. The figure on the bottom shows Fidelity Magellan Fund as shown in the top figure below. In the relative style purity of the DFA U.S. Large Company Portfolio, which also has the S&P 500 as its benchmark.

Sources: © Morningstar,Inc. IFA. This is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product or service. There are no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal.

Index Fund Advisors, Inc. 12 STEP 7: SILENT PARTNERS Recognize The Partners in Your Returns

There are many silent partners that quietly but determinably Part of the disparity in ending wealth is due to active eat away at an active investor’s returns pie. A partial list managers charging higher fees than passive managers of silent partners that erode investors’ returns includes as compensation for their perceived “skill.” In both U.S. state and federal taxes, sales commissions, mutual fund and non-U.S. strategies, the average actively managed expense ratios, fund turnover, and transaction costs. fund is more expensive than the average passive fund.

A John Bogle study concluded that over a 25-year period, The bar chart reveals the disparity in average expense $10,000 invested in the average managed equity fund ratios between all mutual funds and IFA Index Portfolio grew to a pre-tax value of $108,300, and an after-tax 60. As of December 2019, a similar portfolio of all mutual value of $71,700. In contrast, $10,000 invested in the S&P funds would have been more than three times as costly 500 grew to a pre-tax value of $181,800 and an after-tax as IFA Index Portfolio 60. value of $159,000.7 Turnover is also a silent devourer of wealth. Active mutual funds are known to have higher turnover rates than passive funds, creating tax liabilities that erode returns. Even for non-taxable investors, high turnover can be expensive. An article in the Financial Analysts Journal stated that the average annual cost of trading 0.99% incurred by equity mutual funds was 1.44%, which even exceeds the average expense ratio of 1.19%.8

Although most index funds are tax efficient by nature, some indexes can be further tax-managed to save an investor more in taxes. Tax-managed index funds 0.30% are efficient at offsetting realized gains with realized losses, deferring the realization of net capital gains and minimizing the receipt of dividend income. The benefit is that unrealized capital gains remain a growing part of the net asset value of a fund and assist in overall wealth accumulation. Sources: © Morningstar,Inc. IFA. See the attached disclosures for more details on the construction and historical data of IFA Index Portfolios. Consider the investment objectives, risks, charges and expenses of the mutual funds carefully before investing.

“Some of active management’s true believers will shift assets from expensive products to more reasonably priced products. Impetus for this move will be the growing realization that high fees sap the performance potential of even skillful managers.” — Richard M. Ennis, editor, Financial Analysts Journal, as quoted in John C. Bogle’s The Little Book on Common Sense Investing

13 IFA | 12-Step Brochure STEP 8: RISKESE Understand How Risk, Return and Time are Interconnected

Index funds investors are optimally rewarded for for a spectrum of the 100 IFA Index Portfolios understanding and shouldering stock market risk. In fact, (numbered) and their composite indexes (lettered) the very reason investors should expect to earn a return for a 50-year time period. Also shown are the indexes is because of the risks they take. The key is to take the that IFA underweights (letters in squares). These asset risks that have shown to compensate investors and to classes are underweighted because they have shown to diversify away uncompensated risks. Stock concentration, deliver higher risk without an adequate corresponding fund manager speculation, performance chasing, market return. For example, the U.S. Small Growth Index carried timing, and sector concentration are uncompensated risks significant risk but had lower returns than the Emerging that carry no additional expected return beyond that of a Markets Value Index. The IFA Index Portfolios are market portfolio. comprised of funds that enable reasonable returns for the risks involved. This is why investors should take on The beneficial relationship between risk and return for as much of the right risks as their risk capacity allows, passive investors is set forth in the scatter plot shown rebalance and just hold on for as long as they can. below. The chart plots the risk and return characteristics

50 Years (1/1/1970 - 12/31/2019) 16 merin aret Small Ca merin aret Value 15 Intl Small CaValue merin arets 14 Intl Small Coman .S. Small Ca Value 13 IFA Index Portfolio 5 to 100 .S. Lare 12 Ca Value IFA Indexes 90 95 85 .S. Total .S. Small Ca 11 75 80 aret 70 SP eal state Sim. 10 65 60 S 500 Intl Value S 55 (.S. Lare Ca) 9 50 .S. Lare 5-ear 45 rowt loal 40 .S. Small 8 Fixed 35 rowt 2-ear Income 30 loal 25 Fixed 20 Income 15 6 10 Sort Term 5 overnment 5 1-ear *Square buttons are excluded from IFA Index Portfolios Fixed Income 4 0 2 4 6 8 10 12 14 16 18 20 22 24

Sources: © Morningstar,Inc. IFA. This scatterplot is a type of chart that shows the relationship between historical return and risk as measured by standard deviation. Performance figures may contain both live and back-tested data. All data, including performance data, is provided for illustrative purposes only, it does not represent actual performance of any client portfolio or account and it should not be interpreted as an indication of such performance. IFA Index Portfolios were created in 2000 and use hypothetical back-tested performance, please see Appendix for IFA Index Portfolio Data. Past performance does not guarantee future results. Data is provided for illustrative purposes only, it does not represent actual performance of any client portfolio or account and it should not be interpreted as an indication of such performance. IFA utilizes “standard deviation” as a quantification of risk, see the definition in the Appendix.

Index Fund Advisors, Inc. 14 STEP 8: RISKESE STEP 9: HISTORY Understand How Risk, Return and Time are Interconnected Historical Risks and Returns of Indexes

Historical stock market data provides investors with a The chart below shows historical size, value and profitability powerful set of tools for constructing index portfolios premiums for US, International and Emerging Markets stocks utilizing hypothetical back-tested performance that using the longest dataset available for each market. Within can maximize expected returns at given levels of risk. US stocks, small caps stocks outperformed large cap stocks By analyzing large samples (minimum 50 years) of (Relative Size premium) by 2.02% per year from 1928-2019. hypothetical back-tested performance for various International value stocks have outperformed International asset classes, including stocks, bonds, and real estate, growth stocks (Relative Value premium) by 4.67% per year an investor can better understand the factors that from 1975-2019 and the Profitability premium (Relative academic research has shown to produce relatively performance of high profitability stocks vs. low profitability higher historical returns. stocks) posted outperformance in Emerging Market stocks of 3.07% per year from 1996-2019. Pursuing these different premiums in the market is no free lunch. While investors should expect these premiums to be positive over the long Dimensions of Returns term, there are periods of time where they are not. Up to 92 Years* (1/1/1928 - 12/31/2019) INTERNATIONAL EMERGING US STOCKS STOCKS MARKETS STOCKS 1928 - 2019 1970 - 2019 1989 - 2019 14.26% SIZE PREMIUM 11.94% 9.92% 4.91% 11.70% 9.83% SD: 24 03 SD: 17 46 9.35% SD: 21 76 Relative performance 2.02% SD: 18 70 SD: 8 42 SD: 16 71 1.87% SD: 22 53 of small cap stocks vs SD: 11 27 large cap stocks SD: 7 57 Returns are annualied,and SD Standard Deviation Small Small Large Small Small Large Small Small Large minus Large minus Large minus Large 1928 - 2019 1975 - 2019 1989 - 2019 VALUE PREMIUM 13.32% 12.54% 4.67% 5.10% 11.35% Relative performance 3.18% SD: 24 94 9.36% SD: 17 86 8.65% SD: 22 28 of value stocks vs SD: 18 48 SD: 8 76 SD: 16 65 SD: 9 32 6.25% groth stocks SD: 13 92 SD: 20 61 Returns are annualied,and SD Standard Deviation Value Value Growth Value Value Growth Value Value Growth minus Growth minus Growth minus Growth 1964 - 2019 1990 - 2019 1996 - 2019

PROFITABILITY 11.67% 8.10% 3.63% 9.25% PREMIUM 3.57% SD: 15 07 7.09% 3.07% SD: 20 78 6.18% of high profitability SD: 8 51 SD: 17 91 SD: 6 45 SD: 15 23 3.46% SD: 7 30 SD: 22 51 Relative performance SD: 17 69 stocks vs lo profitability stocks High Prof. High Low High Prof. High Low High Prof. High Low Returns are annualied,and minus Low Prof. Prof. Prof. minus Low Prof. Prof. Prof. minus Low Prof. Prof. Prof. SD Standard Deviation

Information provided by Dimensional Fund Advisors LP. All returns are in USD. *Premiums are calculated as the difference in annualized returns between the two indices described over the period shown. Standard Deviation of Premiums are calculated using monthly premium data and annualized. MSCI indices are gross div. For US stocks, indices are used as follows. Small Cap minus Large Cap: Dimensional US Small Cap Index minus the S&P 500 Index. Value minus Growth: Fama/French US Value Research Index minus the Fama/French US Growth Research Index. High Prof minus Low Prof: Dimensional US High Profitability Index minus the Dimensional US Low Profitability Index. For developed ex US stocks, indices are used as follows. Small Cap minus Large Cap: Dimensional International Small Cap Index minus the MSCI World ex USA Index (gross div.). Value minus Growth: Fama/French International Value Index minus the Fama/French International Growth Index. High Prof minus Low Prof: Dimensional International High Profitability Index minus the Dimensional International Low Profitability Index. For Emerging Markets stocks, indices are used as follows.Small Cap minus Large Cap: Dimensional Emerging Markets Small Cap Index minus MSCI Emerging Markets Index (gross div.). Value minus Growth: Fama/French Emerging Markets Value Index minus Fama/French Emerging Markets Growth Index. High Prof minus Low Prof: Dimensional Emerging Markets High Profitability Index minus the Dimensional Emerging Markets Low Profitability Index. Profitability is measured as operating income before depreciation and amortization minus interest expense, scaled by book. Indexes are not available for direct investment and performance does not reflect the expenses of an actual portfolio. Unless indicated otherwise, the performance includes reinvestment of dividends and capital gains but does not include the deduction of IFA’s advisory fees, transaction costs or taxes. Past performance is no guarantee of future results. Actual returns may be lower. For detailed information on the hypothetical backtested performance data in this chart, including sources, updates and important disclosures, see ifabt.comSee “Index Descriptions” at ifaindexes.com for descriptions of Dimensional andFama/French index data. S&P data © 2020 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. MSCI data © MSCI2020, all rights reserved. © 2020 Index Fund Advisors, Inc. (IFA.com)

15 IFA | 12-Step Brochure STEP 10: RISK CAPACITY Analyze Your Five Dimensions of Risk Capacity

In order to optimize investment outcome from a risk results of the survey provide a personalized Risk Capacity and return perspective, it is IFA’s view that investors Score, which is based on the following five dimensions for should take on as much risk as their risk capacity allows. each investor: time horizon and liquidity needs, attitude Risk capacity can be regarded as a measurement of toward risk, net worth, income and savings rate, and an investor’s ability to earn stock market returns. The investment knowledge. This score is the primary tool IFA problem is that most investors invest without a clear uses to determine the proper asset allocation for each understanding of risk or with an improper measure of client. A higher score suggests a capacity of tolerating high how much risk is right for them. risk investing to obtain the potential for higher returns. A lower score indicates a risk aversion and the need to Through IFA’s Risk Capacity Survey at ifa.com, investors invest more conservatively. Each score corresponds to learn the amount of risk that is appropriate for them. The one of IFA’s 100 Index Portfolios.

FIVE DIMENSIONS OF RISK CAPACITY

Time Attitude

Worth Income Knowledge

Index Fund Advisors, Inc. 16 STEP 10: RISK CAPACITY STEP 11: RISK EXPOSURE Analyze Your Five Dimensions of Risk Capacity Analyze Your Six Dimensions of Risk Exposure

To achieve optimal results, investors need to match their This is accomplished through exposure to six dimensions Risk Capacity Score with a specific risk exposure. At IFA, of risk—dimensions which have been responsible for we call this process, “matching people with portfolios.” approximately 96% of returns.9 Based on the extensive Many investors choose a common 60/40 (stock/bond) research of Eugene Fama and Kenneth French, these asset allocation, regardless of their risk capacity. A more dimensions are: exposure or sensitivity to the market, as prudent strategy is to invest in a portfolio that directly a whole, the degree to which the portfolio is tilted toward corresponds to a particular risk capacity. size (market capitalization), value (book-to-market ratio), and direct profitability (gross profits scaled by book value) IFA’s 100 Index Portfolios cover the spectrum of risk of the equity holdings, as well as exposure to term and and expected return, with portfolios ranging from very default risk for the fixed income holdings. Each of IFA’s high risk to very low risk. Each IFA Index Portfolio is Index Portfolios offers a sophisticated risk-appropriate constructed with a specific blend of asset class index approach, capturing risk exposure in order to maximize funds that capture a quantifiable level of risk exposure. expected returns at a given level of risk exposure.

SIX DIMENSIONS OF RISK EXPOSURE

Market Size Value

Profitability Term Default

17 IFA | 12-Step Brochure STEP 12: INVEST AND RELAX Rebalance, Tax Loss Harvest, Glide Path, & Asset Locate

IFA’s clients enjoy the benefits of investing in 100 risk- to carry higher returns over time. In summary, clients of appropriate, style-pure index portfolios that carry more Index Fund Advisors are able to invest confidently and than 92 years of risk and return data. These portfolios are comfortably as they step off of the expensive, emotional formulated using investment science based on economic roller coaster of active investing. theories and isolated risk factors that have been shown

REBALANCE IFA’s clients benefit from strategies that facilitate investment success. In particular, IFA’s ongoing professional account management includes quarterly analysis for rebalancing opportunities to ensure that portfolio risk exposure remains in line with an individual’s risk capacity.

TAX-LOSS HARVEST An additional value added feature available to IFA’s clients is opportunistic tax-loss harvesting. By selling funds that have experienced significant losses, investors can “bank” capital losses to offset future gains. Once the IRS wash sale rules have been met, the funds are repurchased. Careful consideration is given to the appropriateness of this strategy on a case-by-case basis.

GLIDE PATH IFA’s clients may choose to take advantage of a sophisticated Glide Path feature, creating a “set it and forget it” approach for a successful and less stressful investment strategy. When clients choose the Glide Path option, their portfolios will automatically experience a reduction of one risk level each year, thus permitting a smooth and effortless “glide” into retirement.

ASSET LOCATION Just as important as asset allocation is asset location. For a client who has a mixture of accounts, such as taxable, traditional IRAs and Roth IRAs, taxes can be minimized by constructing an overall portfolio that includes multiple investment vehicles located in different types of accounts. IFA evaluates each account to determine if it should be a stand-alone or part of an asset location strategy.

RETIREMENT ANALYZER A retirement analysis utilizing Monte Carlo simulation helps clients understand key factors in retirement investing. IFA adds these significant enhancements to its suite of services in order to provide a high standard of care to clients who entrust the management of their valued assets to the firm.

Index Fund Advisors, Inc. 18 STEP 12: INVEST AND RELAX IFA INDEX PORTFOLIOS Rebalance, Tax Loss Harvest, Glide Path, & Asset Locate IFA offers 100 globally diversified Index Portfolios Four IFA Index Portfolio fact sheets are shown on the allocated among two broad asset classes: equity (stocks) following pages. The hypothetical back-tested data and fixed income (bonds). for each portfolio consists of: simulated returns and volatility data, charts that represent annual returns and General asset allocations for 20 of these index portfolios growth of $1, corresponding annualized returns, and a are presented below. They are labeled 5 through 100 in 50-year monthly rolling period analysis, which provides five-point increments. IFA Index Portfolio 5, which has a hypothetical back-tested simulation of passive investor the lowest expected risk and return, consists of 95% experiences. bond indexes and 5% stock indexes. Conversely, IFA Index Portfolio 100, which has the highest expected Following the fact sheets are the appendix disclosures risk and return, has no bonds and the stock indexes for hypothetical back-tested performance data and are tilted toward small and value companies in the U.S., the index descriptions used to simulate risk and return international, and emerging markets. characteristics.

IFA Stock Indexes (Global Equity) IFA Bond Indexes (Global Fixed Income)

5 15 25 35 45 55 65 75 85 95

IFA Index Portfolios were created in 2000. Please see Appendix for IFA Index Portfolio Data. IFA Index Portfolios are recommended based on an investor’s risk capacity, which considers their time horizon, attitude towards risk, net worth, income, and investment knowledge. Take the IFA Risk Capacity Survey at ifa.com/survey to determine which index portfolio matches your risk capacity.

“We can extrapolate from the study that for the long-term individual investor, who maintains a consistent asset allocation and leans toward index funds, asset allocation determines about 100% of performance.” – Roger Ibbotson, Ph.D., Ibbotson Associates, “The True Impact of Asset Allocation on Returns”, 2000

19 IFA | 12-Step Brochure IFA Index Portfolio 100 Most Aggressive Global 100% Stocks Suitable for investors who have at least 15 years before needing approximately 20% of their investments and are Global willing to accept a very high degree of volatility in exchange 0% Bonds for high portfolio growth potential.

Simulated Returns and Volatility Data

Growth of $1 ($) 1.21 0.86 1.18 1.16 0.96 1.23 1.36 2.42 4.69 46.79 319.07 15,487

Annualized Return (%) 21.14 -14.22 18.15 16.22 -4.49 7.08 6.39 9.23 8.03 11.61 12.22 11.06

Standard Deviation (%) 15.93 14.68 4.20 13.08 12.47 13.18 12.94 14.68 16.79 15.71 15.88 21.97 (Annualized Volatility)

Annual Returns: 50 Years (1/1/1970 - 12/31/2019)

Growth of Dollar: 50 Years (1/1/1970 - 12/31/2019) - Log Scale

$319

Performance figures may contain both live and back-tested data. All data, including performance data, is provided for illustrative purposes only, it does not represent actual performance of any client portfolio or account and it should not be interpreted as an indication of such performance. IFA Index Portfolios were created in 2000 and use hypothetical back-tested performance, please see Appendix for IFA Index Portfolio Data. The performance of index portfolios does reflect the deduction of a 0.9% annual investment advisory fee, which is the maximum advisory fee charged by IFA, and mutual fund fees associated with the management of an actual portfolio over the entire period. Past performance does not guarantee future results. IFA utilizes “standard deviation” as a quantification of risk, see the definition in the Appendix.

Index Fund Advisors, Inc. 20 IFA Index Portfolio 100 Simulated Passive Investor Experiences (SPIEs) | Based on 50 Years (1/1/1970 - 12/31/2019) Examples of 15-Year Monthly Rolling Periods 1

1 Jan 70 15 Yrs Dec 84 2 Feb 70 15 Yrs Jan 85 3 Mar 70 15 Yrs Feb 85 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 Rolling Period Return Data: 50 Years (1/1/1970 - 12/31/2019) Median Return Median Lowest Lowest Growth Highest Highest Growth Per Period # of Number of: Ann'lzd Range Growth Rolling Rolling of $1 in Rolling Rolling of $1 in Rolling Return (High of $1 Period Period Lowest Period Period Highest Yrs Months Periods (50th %ile) minus Low) Date Return Period Date Return Period 1/12 1 600 1.49% 44.97% $1.01 10/08-10/08 -22.60% $0.77 1/75-1/75 22.36% $1.22 1/4 3 598 3.83% 77.34% $1.04 9/08-11/08 -37.21% $0.63 3/09-5/09 40.13% $1.40 1/2 6 595 6.83% 109.72% $1.07 9/08-2/09 -47.75% $0.52 3/09-8/09 61.97% $1.62 1 12 589 15.89% 126.92% $1.16 3/08-2/09 -49.41% $0.51 3/09-2/10 77.51% $1.78 2 24 577 14.60% 82.55% $1.31 3/07-2/09 -31.39% $0.47 3/09-2/11 51.16% $2.28 3 36 565 12.76% 55.40% $1.43 3/06-2/09 -18.28% $0.55 8/84-7/87 37.13% $2.58 4 48 553 12.57% 44.03% $1.61 3/05-2/09 -10.39% $0.64 10/74-9/78 33.63% $3.19 5 60 541 12.94% 38.48% $1.84 3/04-2/09 -5.44% $0.76 8/82-7/87 33.04% $4.17 6 72 529 12.57% 28.62% $2.03 10/05-9/11 1.36% $1.08 1/75-12/80 29.98% $4.82 7 84 517 12.66% 26.55% $2.30 3/02-2/09 0.64% $1.05 8/82-7/89 27.19% $5.38 8 96 505 13.11% 24.07% $2.68 3/01-2/09 0.83% $1.07 1/75-12/82 24.90% $5.92 9 108 493 12.82% 24.72% $2.96 3/00-2/09 1.06% $1.10 1/75-12/83 25.79% $7.88 10 120 481 12.54% 20.93% $3.26 3/99-2/09 3.38% $1.39 9/77-8/87 24.31% $8.81 11 132 469 12.85% 22.60% $3.78 3/98-2/09 2.19% $1.27 1/75-12/85 24.79% $11.43 12 144 457 12.75% 21.48% $4.22 3/97-2/09 3.44% $1.50 1/75-12/86 24.92% $14.44 13 156 445 13.15% 20.97% $4.98 3/96-2/09 4.42% $1.75 10/74-9/87 25.39% $18.94 14 168 433 13.36% 18.12% $5.79 3/95-2/09 5.74% $2.18 1/75-12/88 23.86% $20.00 1515 1 180 421 13.42% 18.87% $6.61 3/94-2/09 5.22% $2.15 1/75-12/89 24.09% $25.47 20 240 361 13.97% 12.85% $13.66 3/89-2/09 7.52% $4.26 10/74-9/94 20.37% $40.78 30 360 241 13.15% 8.71% $40.67 9/89-8/19 9.13% $13.76 1/75-12/04 17.84% $137.62 40 480 121 13.40% 3.30% $152.68 9/79-8/19 11.86% $88.62 1/75-12/14 15.17% $283.74 50 600 1 12.22% -- $319.07 1/70-12/19 12.22% $319.07 1/70-12/19 12.22% $319.07 421 15-Year 1 Monthly Rolling Periods: 50 Years (1/1/1970 - 12/31/2019) 50th*5th* 50th*25th* 50th* 50th*75th* 50th*95th* *Percentile ranking of 00.00%7.59% 00.00%9.53% 00.00%13.42% 00.00%17.26% 00.00%19.69% all the rolling periods. 100 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Annualized Returns for 15-Year Monthly Rolling Periods (%) 1. 15-years represents the estimated average holding period for investors who score 100 on the Risk Capacity Survey at ifa.com. 2. The Median Annualized Returns, Return Range, and Median Growth of $1 shown for 1, 3, and 6 month periods are not annualized.

21 IFA | 12-Step Brochure IFA Index Portfolio 75 Moderately Aggressive Global 75% Stocks Suitable for investors who have at least 13 years before needing approximately 20% of their investments and are Global willing to accept a higher degree of volatility in order to 25% Bonds achieve higher portfolio growth potential.

Simulated Returns and Volatility Data

Growth of $1 ($) 1.16 0.90 1.14 1.12 0.97 1.18 1.28 2.02 3.85 28.45 169.81 5,221

Annualized Return (%) 16.36 -10.48 13.66 12.22 -3.40 5.79 5.12 7.28 6.97 10.04 10.82 9.75

Standard Deviation (%) 12.12 10.89 3.12 9.66 9.17 9.92 9.67 10.97 12.37 11.77 11.99 16.40 (Annualized Volatility)

Annual Returns: 50 Years (1/1/1970 - 12/31/2019)

Growth of Dollar: 50 Years (1/1/1970 - 12/31/2019) - Log Scale

$170

Index Fund Advisors, Inc. 22 IFA Index Portfolio 75 Simulated Passive Investor Experiences (SPIEs) | Based on 50 Years (1/1/1970 - 12/31/2019) Examples of 13-Year Monthly Rolling Periods 1

1 Jan 70 13 Yrs Dec 82 2 Feb 70 13 Yrs Jan 83 3 Mar 70 13 Yrs Feb 83 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 Rolling Period Return Data: 50 Years (1/1/1970 - 12/31/2019) Median Return Median Lowest Lowest Growth Highest Highest Growth Per Period # of Number of: Ann'lzd Range Growth Rolling Rolling of $1 in Rolling Rolling of $1 in Rolling Return (High of $1 Period Period Lowest Period Period Highest Yrs Months Periods (50th %ile) minus Low) Date Return Period Date Return Period 1/12 1 600 1.21% 33.84% $1.01 10/87-10/87 -16.86% $0.83 1/75-1/75 16.97% $1.17 1/4 3 598 3.29% 55.00% $1.03 9/08-11/08 -26.54% $0.73 3/09-5/09 28.46% $1.28 1/2 6 595 5.76% 79.94% $1.06 9/08-2/09 -35.86% $0.64 3/09-8/09 44.09% $1.44 1 12 589 13.29% 92.76% $1.13 3/08-2/09 -37.31% $0.63 3/09-2/10 55.46% $1.55 2 24 577 12.46% 59.99% $1.26 3/07-2/09 -22.50% $0.60 3/09-2/11 37.49% $1.89 3 36 565 11.16% 42.68% $1.37 3/06-2/09 -12.11% $0.68 8/84-7/87 30.57% $2.23 4 48 553 11.01% 34.62% $1.52 3/05-2/09 -6.23% $0.77 7/82-6/86 28.39% $2.72 5 60 541 11.24% 30.19% $1.70 3/04-2/09 -2.68% $0.87 8/82-7/87 27.51% $3.37 6 72 529 10.89% 21.33% $1.86 10/05-9/11 2.62% $1.17 1/75-12/80 23.95% $3.63 7 84 517 10.97% 20.77% $2.07 3/02-2/09 2.08% $1.16 8/82-7/89 22.86% $4.22 8 96 505 11.41% 18.67% $2.37 3/01-2/09 2.18% $1.19 1/75-12/82 20.85% $4.55 9 108 493 11.15% 19.13% $2.59 3/00-2/09 2.36% $1.23 1/75-12/83 21.49% $5.76 10 120 481 10.89% 16.62% $2.81 3/99-2/09 4.06% $1.49 9/77-8/87 20.68% $6.55 11 132 469 11.08% 17.85% $3.18 3/98-2/09 3.14% $1.40 1/75-12/85 20.99% $8.13 12 144 457 11.17% 17.20% $3.56 6/07-5/19 3.90% $1.58 1/75-12/86 21.09% $9.94 1313 1 156 445 11.26% 16.59% $4.00 3/96-2/09 4.85% $1.85 10/74-9/87 21.43% $12.49 14 168 433 11.34% 14.67% $4.50 1/05-12/18 5.45% $2.10 1/75-12/88 20.13% $13.03 15 180 421 11.40% 14.89% $5.05 3/94-2/09 5.41% $2.20 1/75-12/89 20.30% $15.99 20 240 361 12.16% 10.66% $9.92 9/99-8/19 6.83% $3.75 10/74-9/94 17.49% $25.12 30 360 241 11.71% 7.25% $27.69 9/89-8/19 8.05% $10.20 1/75-12/04 15.30% $71.51 40 480 121 11.72% 2.64% $84.04 9/79-8/19 10.43% $52.92 1/75-12/14 13.07% $136.31 50 600 1 10.82% -- $169.81 1/70-12/19 10.82% $169.81 1/70-12/19 10.82% $169.81 445 13-Year 1 Monthly Rolling Periods: 50 Years (1/1/1970 - 12/31/2019) 50th*5th* 50th*25th* 50th* 50th*75th* 50th*95th* *Percentile ranking of 00.00%6.49% 00.00%8.23% 00.00%11.26% 00.00%15.39% 00.00%18.66% all the rolling periods. 100 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Annualized Returns for 13-Year Monthly Rolling Periods (%) 1. 13-years represents the estimated average holding period for investors who score 75 on the Risk Capacity Survey at ifa.com. 2. The Median Annualized Returns, Return Range, and Median Growth of $1 shown for 1, 3, and 6 month periods are not annualized.

23 IFA | 12-Step Brochure IFA Index Portfolio 50 Moderate Global 50% Stocks Suitable for investors who have 8 years before needing approximately 20% of their investments and are willing to Global accept a moderate degree of volatility in order to achieve 50% Bonds moderate portfolio growth potential.

Simulated Returns and Volatility Data

Growth of $1 ($) 1.12 0.93 1.09 1.08 0.98 1.14 1.20 1.66 2.98 15.99 80.11 1,233

Annualized Return (%) 11.59 -6.74 9.17 8.23 -2.31 4.35 3.74 5.21 5.61 8.24 9.16 8.04

Standard Deviation (%) 8.18 7.15 2.00 6.27 5.94 6.62 6.39 7.29 8.11 7.91 8.22 11.07 (Annualized Volatility)

Annual Returns: 50 Years (1/1/1970 - 12/31/2019)

Growth of Dollar: 50 Years (1/1/1970 - 12/31/2019) - Log Scale

$80

Index Fund Advisors, Inc. 24 IFA Index Portfolio 50 Simulated Passive Investor Experiences (SPIEs) | Based on 50 Years (1/1/1970 - 12/31/2019) Examples of 8-Year Monthly Rolling Periods 1

1 Jan 70 8 Yrs Dec 77 2 Feb 70 8 Yrs Jan 78 3 Mar 70 8 Yrs Feb 78 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 Rolling Period Return Data: 50 Years (1/1/1970 - 12/31/2019) Median Return Median Lowest Lowest Growth Highest Highest Growth Per Period # of Number of: Ann'lzd Range Growth Rolling Rolling of $1 in Rolling Rolling of $1 in Rolling Return (High of $1 Period Period Lowest Period Period Highest Yrs Months Periods (50th %ile) minus Low) Date Return Period Date Return Period 1/12 1 600 0.90% 23.01% $1.01 10/87-10/87 -11.42% $0.89 1/75-1/75 11.59% $1.12 1/4 3 598 2.58% 35.74% $1.03 9/08-11/08 -16.53% $0.83 1/75-3/75 19.21% $1.19 1/2 6 595 4.61% 51.77% $1.05 9/08-2/09 -23.45% $0.77 3/09-8/09 28.31% $1.28 1 12 589 10.17% 65.12% $1.10 3/08-2/09 -24.52% $0.75 7/82-6/83 40.60% $1.41 2 24 577 9.88% 40.56% $1.21 3/07-2/09 -13.74% $0.74 7/84-6/86 26.82% $1.61 3 36 565 9.46% 30.50% $1.31 3/06-2/09 -6.44% $0.82 8/84-7/87 24.05% $1.91 4 48 553 9.35% 26.12% $1.43 3/05-2/09 -2.64% $0.90 7/82-6/86 23.48% $2.32 5 60 541 9.35% 22.54% $1.56 3/04-2/09 -0.52% $0.97 8/82-7/87 22.03% $2.71 6 72 529 9.18% 16.67% $1.69 7/07-6/13 3.05% $1.20 10/81-9/87 19.72% $2.94 7 84 517 9.22% 16.21% $1.85 3/02-2/09 2.91% $1.22 4/80-3/87 19.12% $3.40 88 1 96 505 9.46% 14.54% $2.06 3/01-2/09 2.99% $1.27 10/81-9/89 17.53%$3.64 9 108 493 9.44% 13.94% $2.25 2/07-1/16 3.16% $1.32 1/75-12/83 17.10% $4.14 10 120 481 9.36% 13.22% $2.45 6/07-5/17 3.73% $1.44 9/77-8/87 16.94% $4.78 11 132 469 9.44% 13.56% $2.70 11/07-10/18 3.52% $1.46 1/75-12/85 17.08% $5.67 12 144 457 9.33% 13.86% $2.92 6/07-5/19 3.32% $1.48 1/75-12/86 17.18% $6.70 13 156 445 9.43% 13.26% $3.23 12/06-11/19 4.07% $1.68 10/74-9/87 17.33% $7.98 14 168 433 9.31% 11.94% $3.48 1/05-12/18 4.38% $1.82 1/75-12/88 16.31% $8.29 15 180 421 9.36% 11.65% $3.83 1/05-12/19 4.84% $2.03 10/74-9/89 16.49% $9.87 20 240 361 10.29% 8.93% $7.09 9/99-8/19 5.53% $2.93 10/74-9/94 14.46% $14.89 30 360 241 10.10% 5.90% $17.93 10/89-9/19 6.72% $7.04 1/75-12/04 12.62% $35.35 40 480 121 9.82% 1.98% $42.32 9/79-8/19 8.79% $29.13 9/74-8/14 10.78% $60.04 50 600 1 9.16% -- $80.11 1/70-12/19 9.16% $80.11 1/70-12/19 9.16% $80.11 505 8-Year 1 Monthly Rolling Periods: 50 Years (1/1/1970 - 12/31/2019) 50th*5th* 50th*25th* 50th* 50th*75th* 50th*95th* *Percentile ranking of 00.00%4.31% 00.00%7.07% 00.00%9.46% 00.00%13.26% 00.00%16.45% all the rolling periods. 100 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Annualized Returns for 8-Year Monthly Rolling Periods (%) 1. 8-years represents the estimated average holding period for investors who score 50 on the Risk Capacity Survey at ifa.com. 2. The Median Annualized Returns, Return Range, and Median Growth of $1 shown for 1, 3, and 6 month periods are not annualized.

25 IFA | 12-Step Brochure IFA Index Portfolio 25 Conservative Global 25% Stocks Suitable for investors who have 5 years before needing approximately 20% of their investments and are willing to Global accept a conservative degree of risk for incremental 75% Bonds appreciation potential with emphasis on capital preservation.

Simulated Returns and Volatility Data

Growth of $1 ($) 1.07 0.97 1.05 1.04 0.99 1.08 1.12 1.35 2.18 8.33 33.60 204.75

Annualized Return (%) 6.82 -2.99 4.68 4.23 -1.22 2.75 2.23 3.03 3.96 6.24 7.28 5.96

Standard Deviation (%) 4.10 3.47 0.89 2.98 2.83 3.28 3.13 3.64 4.04 4.20 4.75 5.98 (Annualized Volatility)

Annual Returns: 50 Years (1/1/1970 - 12/31/2019)

Growth of Dollar: 50 Years (1/1/1970 - 12/31/2019) - Log Scale

$34

Index Fund Advisors, Inc. 26 IFA Index Portfolio 25 Simulated Passive Investor Experiences (SPIEs) | Based on 50 Years (1/1/1970 - 12/31/2019) Examples of 5-Year Monthly Rolling Periods 1

1 Jan 70 5 Yrs Dec 74 2 Feb 70 5 Yrs Jan 75 3 Mar 70 5 Yrs Feb 75 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 Rolling Period Return Data: 50 Years (1/1/1970 - 12/31/2019) Median Return Median Lowest Lowest Growth Highest Highest Growth Per Period # of Number of: Ann'lzd Range Growth Rolling Rolling of $1 in Rolling Rolling of $1 in Rolling Return (High of $1 Period Period Lowest Period Period Highest Yrs Months Periods (50th %ile) minus Low) Date Return Period Date Return Period 1/12 1 600 0.66% 12.18% $1.01 10/87-10/87 -5.09% $0.95 4/80-4/80 7.08% $1.07 1/4 3 598 1.70% 20.61% $1.02 9/08-11/08 -7.11% $0.93 4/80-6/80 13.50% $1.13 1/2 6 595 3.26% 28.47% $1.03 9/08-2/09 -10.58% $0.89 7/82-12/82 17.89% $1.18 1 12 589 7.47% 40.41% $1.07 3/08-2/09 -11.09% $0.89 7/82-6/83 29.32% $1.29 2 24 577 7.12% 26.26% $1.15 3/07-2/09 -5.05% $0.90 7/84-6/86 21.21% $1.47 3 36 565 7.11% 18.78% $1.23 3/06-2/09 -1.20% $0.96 8/84-7/87 17.58% $1.63 4 48 553 7.27% 18.12% $1.32 3/05-2/09 0.46% $1.02 7/82-6/86 18.58% $1.98 55 1 60 541 7.05% 15.98% $1.41 1/14-12/18 1.10% $1.06 9/81-8/86 17.09%$2.20 6 72 529 7.32% 14.52% $1.53 12/13-11/19 1.90% $1.12 4/80-3/86 16.42% $2.49 7 84 517 7.36% 13.48% $1.64 5/11-4/18 2.29% $1.17 4/80-3/87 15.77% $2.79 8 96 505 7.60% 12.41% $1.80 6/11-5/19 2.03% $1.17 4/80-3/88 14.44% $2.94 9 108 493 7.66% 11.28% $1.94 11/07-10/16 2.45% $1.24 4/80-3/89 13.73% $3.18 10 120 481 7.76% 10.66% $2.11 6/07-5/17 2.67% $1.30 4/80-3/90 13.33% $3.50 11 132 469 7.71% 10.80% $2.26 11/07-10/18 2.40% $1.30 9/75-8/86 13.20% $3.91 12 144 457 7.80% 10.99% $2.46 6/07-5/19 2.42% $1.33 9/74-8/86 13.40% $4.52 13 156 445 7.74% 10.30% $2.64 12/06-11/19 2.84% $1.44 9/74-8/87 13.14% $4.98 14 168 433 7.59% 9.48% $2.78 1/05-12/18 3.01% $1.51 10/74-9/88 12.49% $5.19 15 180 421 7.58% 9.37% $2.99 1/04-12/18 3.22% $1.61 10/74-9/89 12.59% $5.92 20 240 361 8.46% 7.37% $5.07 9/99-8/19 3.95% $2.17 9/74-8/94 11.32% $8.54 30 360 241 8.31% 4.64% $10.98 10/89-9/19 5.17% $4.54 1/75-12/04 9.81% $16.56 40 480 121 7.93% 1.52% $21.18 9/79-8/19 6.97% $14.81 5/70-4/10 8.49% $26.02 50 600 1 7.28% -- $33.60 1/70-12/19 7.28% $33.60 1/70-12/19 7.28% $33.60 541 5-Year 1 Monthly Rolling Periods: 50 Years (1/1/1970 - 12/31/2019) 50th*5th* 50th*25th* 50th* 50th*75th* 50th*95th* *Percentile ranking of 00.00%2.27% 00.00%4.82% 00.00%7.05% 00.00%9.67% 00.00%13.69% all the rolling periods. 100 90 80 70 60 50 40 30 20 10 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Annualized Returns for 5-Year Monthly Rolling Periods (%) 1. 5-years represents the estimated average holding period for investors who score 25 on the Risk Capacity Survey at ifa.com. 2. The Median Annualized Returns, Return Range, and Median Growth of $1 shown for 1, 3, and 6 month periods are not annualized.

27 IFA | 12-Step Brochure APPENDIX: DISCLOSURE FOR CHARTS

IFA Index Portfolio Data Standard Deviation For detailed information on the hypothetical back-tested performance IFA utilizes standard deviation a quantification of risk. Standard data shown in this booklet, including sources, and important deviation is a common measure of risk used by academics, analysts, disclosures, see: Disclosures for the Hypothetical Back-tested portfolio managers and advisors. The higher the standard deviation Performance of Model IFA Index Portfolios and Indexes. IFA Index the higher the risk. Standard deviation is calculated as the square Portfolios are labeled with numbers that refer to the percentage of root of the variance of the data from the average, which is a measure stock indexes in the asset allocation, as opposed to the allocation of of the dispersion of a set of data from its average. If data points are bond indexes. For example, an IFA Index Portfolio 90 is 90% IFA stock far from the average, there is a higher deviation within the data set; indexes and 10% IFA bond indexes. The construction of IFA Indexes thus, the more spread out the data, the higher the standard deviation. data starts in 1928 and introduces live mutual fund data of funds that In finance, standard deviation is applied to the rate of return ofan are similar to the preceding index upon the inception date of the funds investment to measure the investment’s volatility. Standard deviation and uses that monthly mutual fund data up to the current month is also known as historical volatility and is used by investors as a gauge and are defined in detail at IFA Index Data Sources. Hypothetical for the amount of expected volatility or the uncertainty of expected back-tested performance of IFA Index Portfolios assumes annual returns. Among indexes of stocks, those with smaller companies, rebalancing of the asset allocation of the components comprising the international companies and emerging market companies have had IFA Index Portfolios. The hypothetical back-tested performance of the higher standard deviations than large companies in the U.S. in long IFA Indexes and IFA Index Portfolios was achieved with the benefit time periods. Among bond indexes, those with longer durations and of hindsight; it does not represent actual investment strategies for greater probabilities of default have had higher standard deviations the entire period; and it does not reflect the impact that economic in long time periods. However, it is not true that all indexes with and market factors may have had on the advisor’s decision making higher standard deviations, such as small growth companies have had if the advisor were actually managing client money during the period higher returns in long time periods. Annualized standard deviation shown. The performance of index portfolios does reflect the deduction is an approximation obtained by multiplying the monthly standard of a 0.9% annual investment advisory fee, which is the maximum deviation by the square root of 12, which is 3.46. Please note that advisory fee charged by IFA, and mutual fund fees associated with the number computed from annual data may differ materially the management of an actual portfolio over the entire period. Unless from the estimate obtained from monthly data. IFA has chosen this indicated otherwise, the performance of the IFA Indexes when shown methodology because Morningstar uses the same method. In those individually, does reflect the deduction of mutual fund fees, include charts and tables where the standard deviation of daily returns is reinvestment of dividends and capital gains but does not include the shown, it is estimated as the standard deviation of monthly returns deduction of IFA advisory fees, transaction costs or taxes, which if divided by the square root of 22, which is 4.69. included, would lower performance. The IFA Indexes and IFA Index Portfolios were created by IFA in 2000.

REFERENCES

1. Dalbar, Inc. “2020 Quantitative Analysis of Investor Behavior, “ (2020); Dimensional Returns 2.0, ifabt.com. 2. Laurent Barras, Olivier Scaillet, and Russ Wermers, “False Discoveries in Mutual Fund Performance: Measuring Luck in Estimating Alphas,” The Journal of Finance, (2010). 3. William Sharpe, “Likely Gains from Market Timing,” Financial Analysts Journal, vol. 31, no. 2 (1975). 4. “Technical Note: Calculation of Forecasting Accuracy,” SEI Corporation position paper, April 1992. 5. Sample list taken from CXO Advisory Group, LLC, www.cxoadvisory.com/gurus/ 6. Amit Goyal and Sunil Wahal, “The Selection and Termination of Investment Management Firms by Plan Sponsors,” The Journal of Finance, vol. 63, no. 4 (2008). 7. John C. Bogle, “The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns,” (Hoboken: John Wiley & Sons, Inc. 2007). 8. Edelen, Roger, Richard Evans & Gregory Kadlec. “Shedding Light on ‘Invisible’ Costs: Trading Costs and Mutual Fund Performance.” Financial Analysts Journal: Vol. 69, No. 1, 2013 9. Dimensional study of 44 institutional equity pension plans with $425 billion total assets, 2002.

Index Fund Advisors, Inc. i DISCLOSURES FOR THE HYPOTHETICAL BACK-TESTED PERFORMANCE OF APPENDIX: DISCLOSURE FOR CHARTS MODEL IFA INDEX PORTFOLIOS AND INDEXES

Index Fund Advisors, Inc. (IFA) does not guarantee any minimum level Hypothetical Back-tested Performance of investment performance or the success of any index portfolio, 1. The hypothetical back-tested performance data comprising the IFA index, mutual fund or investment strategy. Past performance does Index data represents a combination of index data and actual mutual not guarantee future results. There is a potential for loss in any fund data. The monthly data series begins with index data on January 1, investment, including loss of principal invested. All investments involve 1928 and introduces live mutual fund data upon the inception date of risk, and different types of investments involve varying degrees of each of the mutual funds. risk. Investment recommendations will not always be profitable. No representation is being made that any IFA client account will or is likely 2. The investment strategy of the IFA index portfolios is a buy and hold to achieve profit or losses similar to those shown in hypothetical back- strategy with annual rebalancing of the index allocation on the first of tested performance. Impacts of federal and state taxes and trading each year. The data shown is hypothetical and is provided to illustrate costs are not included in the results of index portfolio or index returns. historical risk and return performance had the IFA Indexes and IFA Hypothetical back-tested performance information shown in text, Index Portfolios been available over the relevant time period shown. charts, tables and graphs is provided for informational purposes only IFA did not offer the IFA Index Portfolios until November 1999. Prior to and should not be considered investment advice or a recommendation November 1999, IFA did not manage client assets. to buy or sell any types of securities. All performance results of the IFA Indexes and IFA Index Portfolios Overview, Index Funds, IFA Indexes are based on performance of indexes in the IFA Index Portfolios. The The IFA investment strategy is based on principles generally known as hypothetical back-tested performance was achieved with the benefit of Modern Portfolio Theory and the Fama and French Four Factor Model hindsight; it does not represent actual investments in any investment for Equities and Two Factor Model for Fixed Income. IFA Index portfolios strategies. are designed to provide substantial global diversification in order to reduce investment concentration and the resulting potential increased There are certain limitations inherent in hypothetical model risk caused by the volatility of individual companies, indexes, or asset results like those portrayed, particularly that such hypothetical classes. model returns do not reflect trading in actual client accounts and do not reflect the impact that material economic and market IFA defines “index funds” as funds that follow a set of rules of ownership factors may have had on the adviser’s decision-making had the that are held constant regardless of market conditions. An important adviser actually been managing client funds. Unlike an actual characteristic of an index fund is that its rules of ownership are not performance record, hypothetical back-tested performance results based on a forecast of short-term events or the mispricing of securities. do not represent actual trading. These types of simulated trading Therefore, an investment strategy that is limited to the buying and programs, in general, benefit compared to actual performance rebalancing of a portfolio of index funds is often referred to as passive results because such simulated programs are designed with investing, as opposed to active investing. the benefit of hindsight. In addition, simulated trading does not involve or take into account financial risk and does not take into The indexes constructed by IFA (the “IFA Indexes”) include several stock account that material and market factors may have impacted IFA’s and bond indexes that represent a monthly data series that begins with decision making, all of which can adversely affect actual trading index data from various sources on January 1, 1928. The construction results and performance. For example, the ability to withstand of IFA Indexes data introduces live mutual fund data of funds that are losses or adhere to a particular trading program in spite of trading similar to the preceding index upon the inception date of the funds and losses are material points which can also adversely affect markets uses that monthly mutual fund data up to the current month. in general or the implementation of any specific trading program. Hypothetical back-tested performance does not represent actual Index portfolios created by IFA (the “IFA Index Portfolios”) are allocations performance, trading costs or the impact of taxes and should not of a globally diversified selection of between 11 and 15 IFA Indexes. be interpreted as an indication of such performance. Each IFA Index Portfolio is assigned a designation number based on the allocation of stock indexes compared to bond indexes within a 3. Hypothetical back-tested performance also differs from actual particular IFA Index Portfolio. For example, the IFA Index Portfolio 90 is performance because it is achieved through the retroactive application 90% IFA stock indexes and 10% IFA bond indexes. of model index portfolios designed with the benefit of hindsight. As a result, the IFA Index Portfolios may be changed from time to time and The data for both the IFA Indexes and the model data for IFA Index the effect on hypothetical performance results could be either favorable Portfolios is hypothetical back-tested performance data that represents or unfavorable. Hypothetical back-tested performance is calculated by a combination of index data and mutual fund data. Please refer to the using a software program that starts with the first day of a selected IFA Indexes Data Sources page at www.ifaindexes.com for additional month and ends with the last day of a selected month. Whenever the important information, including a description and the time series term IFA Index Portfolio value data is used, it is based on a starting value construction of the underlying indexes and mutual funds relating to of one at the beginning of stated time period. each IFA Index. The IFA Index Data Sources, IFA Indexes Time Series Construction (see: http://www.ifa.com/disclosures/charts/#timeseries) 4. Hypothetical back-tested performance results for IFA Index Portfolios and several of the Dimensional Indexes (see: http://www.ifa.com/ are based on a buy and hold strategy, with annual rebalancing on the disclosures/charts/#dfafunds) are an integral part of this disclosure and first of each year. It is important to understand that the assumption should be read in conjunction with this explanation of the hypothetical of first of the year annual rebalancing has an impact on the monthly back-tested performance of the IFA Indexes and the model IFA Index returns reported for IFA Index Portfolios throughout the year. If there Portfolios, which are allocations of the IFA Indexes. In addition, an were monthly rebalancing instead, the monthly return would be extensive glossary of terms used throughout IFA’s content, which calculated with the assumption that the portfolio is in balance at the includes these disclosures, can be found at https://www.ifa.com/ beginning of each month. For annual rebalancing, the year-to-date and glossary/. monthly return is calculated with the assumption that the portfolio is in balance only at the beginning of each year. In actual client portfolios,

ii V 9-9-2020 IFA | 12-Step Brochure however, accounts are reviewed quarterly and rebalancing occurs as as the underlying index, DFA or Fama/ French, respectively, calculate needed. Generally, rebalancing events are recommended by IFA when the simulated index data used by IFA for the corresponding IFA Index. a client portfolio exceeds the applicable variance threshold assigned by Such simulated index data does not reflect actual mutual fund data IFA to each IFA Index Portfolio, and rebalancing is implemented with prior to the inception date of the mutual fund comprising the IFA Index. client approval. Rebalancing actions are dependent on both market Accordingly, the results shown during the periods prior to the inception conditions and individual client cash inflows and outflows, along with date of a mutual fund do not represent actual returns of the IFA Index. the cost impact of such transactions on the overall client portfolio. Periods selected other than those shown may have different results, including losses. 5. Hypothetical back-tested performance results for IFA Index Portfolios does include the reinvestment of dividends and capital The launch date for each mutual fund used in creating the IFA Indexes gains and is shown net of IFA’s highest advisory fee of 0.90%, and net may be found in the description of each IFA Index here: https://www.ifa. of mutual fund fees. The impacts of trading costs are not included in com/disclosures/index-data/. the performance results, and will reduce client performance. In the hypothetical performance figures shown, the advisory fee of 0.075% is Live (or actual) mutual fund performance data is used after the date deducted from month end returns, unless stated otherwise. However, each mutual fund was added to the IFA Indexes. The IFA Indexes Times actual client advisory fees are deducted quarterly, in advance by IFA. Series Construction goes back to January 1928, with an increasing Depending on the amount of assets under management and other diversification to international markets, emerging markets and real factors (please see IFA’s Form ADV Part 2 Brochure for additional estate investment trusts as data became available over time. As of information), investment management fees may be less. Note that a January 1928, there are four equity IFA Indexes and two bond IFA client’s return will be reduced by the amount of advisory fees charged Indexes used to construct the IFA Index Portfolios; in January 1970 there by IFA and any other expenses, and the inclusion of IFA’s advisory fees are a total of 8 IFA Indexes, and there are 15 IFA Indexes in March 1998 will have a negative impact on client account performance. IFA accepts to present used to construct the IFA Index Portfolios. For additional no fees from investment product firms. details to see the analysis of the evolution of these IFA Index Portfolios, see: https://www.ifa.com/disclosures/charts/#IFA_evolution. Performance Results and Composition of IFA Indexes and IFA Index Portfolios IFA Indexes are unmanaged however a mutual fund expense ratio has 6. Performance results for actual clients that invest in accordance been deducted from each of the IFA Index returns. Investments cannot with the IFA Index Portfolio models will vary from the back-tested be made directly in an index. Past performance is no guarantee of performance due to the use of mutual funds for implementation that future results. differ from those mutual funds underlying the IFA Index data, current market conditions, investments cash flows, mutual fund allocations, 8. The following summarizes the history of changes made to the IFA changing index allocations over time, frequency and precision of Indexes and IFA Index Portfolios: 1992-2000: IFA’s original Index Portfolios rebalancing, not following IFA’s advice, retention of previously held 20, 40, 60, and 80 (the number refers to the percentage of stock indexes securities, tax loss harvesting and glide path strategies, cash balances, versus bond indexes in the allocation) were suggested by Dimensional lower advisory fees, varying custodian fees, and/or the timing of fee Fund Advisors (“DFA”) in 1992 (ifa.com/pdfs/1992.pdf), as an example deductions. Tax liabilities will vary for each client and can result from of globally diversified asset classes, with moderate modifications in various activities in taxable and tax-deferred accounts. These activities 1995 (ifa.com/pdfs/1995.pdf). Twenty IFA Index Portfolios 5 to 100 include, but are not limited to rebalancing of portfolios, any sale of were created by IFA in 2000, as a lower and higher extension of the DFA securities, tax loss harvesting, interest, dividends and capital gains 1992 risk and return options. There are numerous other changes that distributions from equity funds and individual securities in taxable occurred relating to the IFA Index Portfolios from 2002 to present, which accounts. There are also tax liabilities associated with distributions from include, among other things, changes to performance calculations and tax-deferred accounts. Not all IFA clients follow IFA’s recommendations associated returns (which resulted in returns of the IFA Index Portfolios and depending on unique and changing client and market situations, being both higher and lower, depending on the particular IFA Index IFA may customize the construction and implementation of the IFA Portfolio), and they are described on www.ifa.com/disclosures/history/ Index Portfolios for particular clients so that actual client accounts differ materially from those shown. IFA provides many index portfolio 9. Public Market Index Definitions: implementation strategies, such as the use of tax-managed mutual Performance of the IFA Index Portfolios should not be compared directly funds, global extended maturity bond funds, municipal bond funds, to any one of the public market indexes listed below. Correlation of a social or sustainable screens added to funds, diversified portfolios of portfolio with an index will vary upon different factors including fixed various index fund providers, use of core funds or global asset allocation income portion, market sector and international exposure. IFA will funds. These many implementations options for IFA Index Portfolios provide additional disclosure where comparisons are made. Reference are expected to have risks and potential returns that vary from the to these indexes is not intended to, and does not imply or suggest that IFA Index Portfolio models. As a result of these and other variances, any of the IFA Index Portfolios will achieve returns, experience volatility actual performance for client accounts have been and are likely to be or have other results similar to these indexes. materially different and may be lower than the results shown in the IFA Index Portfolio models. Clients should consult their account statements S&P 500 Index: The S&P 500 Index is an unmanaged float-adjusted for information about how their actual performance compares to that market capitalization-weighted index composed of the 500 most widely of the IFA Index Portfolios and ask your IFA Wealth Advisor to explain held, publicly traded companies, whose assets and/or revenues are any differences. based in the US. The inclusion of information within charts and graphs relating to the S&P 500 Index is for informational purposes and shown 7. The underlying indexes and mutual funds used in constructing the as a comparison to other indexes, index portfolios, stocks or funds and IFA Indexes are IFA’s best estimate of an underlying index or mutual as a general performance of large companies in the U.S. fund that comes closest to the corresponding IFA Index objectives. Simulated index data, retroactively calculated by the applicable mutual Russell 2000 Index: The Russell 2000 index is an index measuring the fund company (e.g. DFA) or research data source (Fama/ French, is used performance of approximately 2,000 smallest-cap American companies for the period prior to the inception of the relevant live mutual fund in the Russell 3000 Index, which is made up of 3,000 of the largest U.S. data and a mutual fund expense ratio is deducted from such simulated stocks. It is a market-cap weighted index. index data. For example, where a DFA or Fama/ French index serves

Index Fund Advisors, Inc. iii Russell 2000 Value Index: The Russell 2000 Value Index refers to a of one year is calculated by multiplying the monthly standard deviation composite of small cap companies located in the United States that also by the square root of 12, which is 3.46. In those charts and tables exhibit a value characteristic. where the annualized standard deviation of daily returns is shown, it is estimated as the standard deviation of monthly returns divided by the Information About Index Fund Advisors, Inc. square root of 22, which is 4.69. 10. Index Fund Advisors, Inc. is an SEC registered Investment Adviser. Information pertaining to IFA’s advisory operations, services, and Please note that the annualized standard deviation number computed fees is set forth in IFA’s current Form ADV Part 2 (Brochure) which is from annual data may differ materially from the estimate obtained from available upon request and at www.adviserinfo.sec.gov. IFA is not monthly data. IFA has chosen this methodology because Morningstar paid any brokerage commissions, sales loads, 12b-1 fees, or any form uses the same method. of compensation from any mutual fund company or broker dealer. The only source of compensation relating to IFA client investments Data Source Information is obtained from asset-based advisory fees paid by clients (note that, 13. IFA licenses data, in part, from Morningstar Direct, a third-party unrelated to IFA’s investment management services, IFA also receives provider of stock market data. Where data is cited from Morningstar tax or accounting related fees paid to IFA’s division providing such tax or Direct, the following disclosures apply: ©2020 Morningstar, Inc. All accounting services). More information about advisory fees, expenses, rights reserved. The information provided by Morningstar Direct and mutual fund fees, and prospectuses for mutual funds can be found at contained herein: (1) is proprietary to Morningstar and/or its content https://www.ifa.com/fees/. providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content Associated Risks providers are responsible for any damages or losses arising from any 11. IFA Index Portfolios will be implemented for clients by investing in use of this information. IFA Index Portfolios, times series, standard an allocation of mutual funds that match the asset classes, mainly (but deviations, and returns calculations are derived using IFA proprietary not exclusively) mutual funds from DFA. All mutual funds carry risks calculation methods, which apply rebalancing rules, monthly fee and those risks can vary depending on the underlying investments adjustments and creates time series construction of data. Our source and the mutual fund’s investment strategy. IFA Index Portfolios are data comes from many places including Dimensional Fund Advisors numbered from 1 to 100 based on the percentage allocation to equity and Morningstar Direct software as indicated in the relevant tables and indexes. IFA Index Portfolios with lower equity allocations and higher charts. bond allocations generally have less risk, as measured by standard deviation, than those with a higher equity allocations and lower bond Disclaimer allocations. There is risk of loss in any securities investment, including 14. DISCLAIMER: THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, the risk of loss of principal that the client should be prepared to bear. AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY Clients are provided with a copy of each mutual fund prospectus, which INFORMATION PROVIDED HEREIN OR ON THE MATERIAL PROVIDED. outlines the risks associated with the mutual fund and should be read This document and the information which it accompanies or to which carefully. There is no guarantee that any IFA Index Portfolio will meet its it refers and relates does not constitute a complete description of investment objectives. IFA’s investment services and is for informational purposes only. It is in no way a solicitation or an offer to sell securities or investment Standard Deviation Information advisory services. Any statements regarding market or other financial 12. IFA utilizes standard deviation as a quantification of risk. Standard information is obtained from sources which IFA and its suppliers believe deviation is a statistic that measures the dispersion of a dataset relative to be reliable, but IFA does not warrant or guarantee the timeliness or to its mean (also called an average), and is a common measure of risk accuracy of this information. Neither IFA’s information providers nor IFA used by academics, analysts, portfolio managers and advisors. The shall be liable for any errors or inaccuracies, regardless of cause, or the higher the standard deviation, the higher the risk. Standard deviation lack of timeliness of, or for any delay or interruption in the transmission is a measure of the dispersion of a dataset relative to its average, thereof to the user. All investments involve risk, including foreign and is calculated as the square root of the variance of the data from currency exchange rates, political risks, market risk, different methods the average. If data points are far from the average, there is a higher of accounting and financial reporting, and foreign taxes. Your use of deviation within the data set; thus, the more spread out the data, the these and all materials provided by IFA, including the www.ifa.com higher the standard deviation. In finance, standard deviation is applied website and the IFA app is your acknowledgement that you have read to the rate of return of an investment to measure the investment’s and understood the full disclaimer as stated above. Updated 4-9-2020. volatility. For additional updates please refer to www.ifabt.com.

Standard deviation is also known as historical volatility and is used 15. This material is intended to be informational in nature and should by investors as a gauge for the amount of expected volatility or the not be construed as tax advice. As a division of Index Fund Advisors, uncertainty of expected returns. For example, among indexes of stocks, Inc., IFA Taxes provides a wide array of tax planning, accounting and those indexes comprised of smaller companies, international companies tax return preparation services for individuals and businesses across and emerging market companies generally have had higher standard the United States. IFA Taxes does not provide auditing or attestation deviations than those indexes comprised of large companies in the services and therefore is not a licensed CPA firm. IRS Circular 230 U.S. over long time periods. As another example, among bond indexes, Disclosure: To ensure compliance with requirements imposed by the those bond indexes with longer durations and greater probabilities of IRS, we inform you that any U.S. Federal tax advice contained in this default have had higher standard deviations over long time periods. communication is not intended or written to be used, and cannot However, it is not true that all indexes with higher standard deviations, be used, for the purpose of (i) avoiding penalties under the Internal such as those indexes comprised of small growth companies, have had Revenue Code or (ii) promoting, marketing or recommending to another higher returns over long time periods. party any transaction or matter herein.

Annualized standard deviation is an approximation of standard deviation over a period of one or more years and, is calculated by multiplying the standard deviation by the square root of the number of periods in one year. By way of example, the annualized standard deviation for a period

iv V 9-9-2020 IFA | 12-Step Brochure INDEX DESCRIPTIONS

The following descriptions, definitions and important information discontinue these arrangements at any time, one year from the date explain how IFA Indexes are constructed to simulate similar risk and of the prospectus. The net expense ratio reflects the total annual fund return characteristics back to 1928. The data for both the IFA Indexes operating expenses of the portfolio after taking into account any such and the model data for IFA Index portfolios is hypothetical backtested fee waiver and/or expense assumption arrangements. Please read the performance data that represents a combination of index data and portfolio’s prospectus for details and more information. live mutual fund data. This long-term data reduces the possible errors of interpreting past short-term returns as being representative of Visit ifa.com/disclosures/history/ to see a summary of history of future short-term returns. Such errors are especially high for periods changes made to the IFA Indexes and Index Portfolios. of 20 years or less. When IFA Indexes are shown in Index Portfolios, all return data reflects a deduction of all mutual fund fees and a 0.90% • All live mutual fund portfolios tracked in IFA indexes are net of annual investment advisory fee, which is the maximum advisory fee all mutual fund fees. charged by IFA. Unless indicated otherwise, data shown for each individual IFA Index is shown without a deduction of the IFA advisory • Indexes and hypothetical backtested data are also net of fee. This method is used because the creation, choice, monitoring estimated mutual fund fees. and rebalancing of diversified index portfolios are the services of the independent investment advisor. Therefore, fees are deducted • IFA Advisory fees are deducted when IFA indexes are presented from the whole portfolio data but not the individual index data. Live in the IFA Index Portfolios. Dimensional Fund Advisors’ (DFA) fund data reflects the deduction of mutual fund advisory fees, brokerage fees, other expenses incurred ADDITIONAL INDEXES by the mutual funds, incorporates actual trading results, and is The Dimensional Indices have been hypothetically back-tested by sourced from DFA. Hypothetical backtested index data also reflects Dimensional Fund Advisors LP and did not exist prior to their index mutual fund expense ratios for the entire period. Both hypothetical inceptions dates. Accordingly, results shown during the periods prior backtested and live data reflect total returns, including dividends and to each Index’s index inception date do not represent actual returns of capital gains, except for IFA/NSDQ Index. For updates on sources and the Index. Other periods selected may have different results, including descriptions of data see www.ifaindexes.com. losses. Backtested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had Certain DFA Mutual Funds have entered into fee waiver and/or the index been calculated over the relevant time periods. Backtested expense assumption arrangements with Dimensional Fund Advisors performance results assume the reinvestment of dividends and LP. In these cases, Dimensional Fund Advisors LP has contractually capital gains. Eugene Fama and Ken French are members of the Board agreed, under certain circumstances, to waive certain fees and/or of Directors of the general partner of, and provide consulting services assume certain expenses of the portfolio. Unless otherwise stated to, Dimensional Fund Advisors LP. in the prospectus, Dimensional Fund Advisors LP may amend or

IFA U.S. Large Company Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Sep 1999: Dimensional US Large Cap Index Minus 0.00167%/mo (net expense ratio) • Oct 1999 - Jun 2017: DFA U.S. Large Company Fund (DFUSX) • Jul 2017 - Present: Schwab S&P 500 Index (SWPPX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional US Large Cap Index: January 1928 - September 1999: Dimensional US Large Cap Index Composition: Market-capitalization-weighted index of securities of the largest US companies whose market capitalization falls in the highest 90% of the total market capitalization of the Eligible Market. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies. Source: CRSP and Compustat. The Dimensional US Large Cap Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to March 1st, 2007. Accordingly, the results shown during the periods prior to March 1st, 2007 do not represent actual returns of the Index. Other periods selected may have different results, including losses. Back-tested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of each month of the year. The index is unmanaged however a mutual fund expense ratio has been deducted from the index returns. Investments cannot be made directly in an index. Past performance is no guarantee of future results.

• DFA U.S. Large Company Fund (DFUSX): October 1999 - June 2017: The U.S. Large Company Portfolio generally invests in the stocks that comprise the S&P 500® Index in approximately the proportions they are represented in the S&P 500® Index. The S&P 500® Index comprises a broad and diverse group of stocks. Generally, these are the U.S. stocks with the largest market capitalizations and, as a group, they generally represent approximately 80% of the total market capitalization of all publicly traded U.S. stocks. Actual performance results assume the reinvestment of dividends and capital gains.

• Schwab S&P 500 Index (SWPPX): July 2017 - Present: The investment seeks to track the total return of the S&P 500® Index. The fund generally invests at least 80% of its net assets in stocks that are included in the S&P 500® Index. It generally gives the same weight to a given stock as the index does. The fund may invest in derivatives, principally futures contracts, and lend its securities to minimize the gap in performance that naturally exists between any index fund and its corresponding index. It may concentrate its investments in an industry or group of industries to the extent that its comparative index is also so concentrated. Actual and back-tested performance results assume the reinvestment of dividends and capital gains.

IFA U.S. Large Cap Value Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Feb 1993: Dimensional Large Value Index minus 0.0217%/mo (net expense ratio) • Mar 1993 - Present: DFA U.S. Large Cap Value Fund (DFLVX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional US Large Cap Value Index: January 1928 - December 1974: Dimensional US Large Cap Value Index Composition: A subset of the US Large Cap Index. The subset is defined as companies whose relative price is in the bottom 25% of the US Large Cap Index after the exclusion of utilities, companies lacking financial data, and companies with negative relative price.

Index Fund Advisors, Inc. v The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies. Source: CRSP and Compustat January 1975 - February 1993: Dimensional US Large Cap Value Index Composition: Consists of companies with market capitalizations above the 1000th largest company of the Eligible market whose relative price is in the bottom 30% of large companies after the exclusion of utilities, companies lacking financial data, and companies with negative relative price. The Index emphasizes securities with higher profitability, lower relative price, and lower market capitalization. Profitability is defined as operating income before depreciation and amortization minus interest expense divided by book equity. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies Source: CRSP and Compustat.

The Dimensional US Large Cap Value Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to March 1st, 2007. Accordingly, the results shown during the periods prior to March 1st, 2007 do not represent actual returns of the Index. Other periods selected may have different results, including losses. Back-tested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of each month of the year. The index is unmanaged however a mutual fund expense ratio has been deducted from the index returns. Investments cannot be made directly in an index. Past performance is no guarantee of future results.The calculation methodology for the Dimensional US Large Cap Value Index was amended on January 1st, 2014 to include profitability as a factor in selecting securities for inclusion in the index.

• DFA US Large Cap Value Portfolio I (DFLVX): March 1993 - Present: The U.S. Large Cap Value Series, using a market capitalization weighted approach, purchases a broad and diverse group of readily marketable securities of large U.S. companies that the Advisor determines to be value stocks. Actual performance results assume the reinvestment of dividends and capital gains.

IFA U.S. Small Cap Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Mar 1992: Dimensional Small Cap Index minus 0.0292%/mo (net expense ratio) • Apr 1992 - Present: DFA U.S. Small Cap Fund (DFSTX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional Small Cap Index: January 1928 - December 1974: Dimensional US Small Cap Index Composition: Market-capitalization-weighted index of securities of the smallest US companies whose market capitalization falls in the lowest 8% of the total market capitalization of the Eligible Market. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies Source: CRSP and Compustat. January 1975 - Mar 1992: Dimensional US Small Cap Index Composition: Market-capitalization-weighted index of securities of the smallest US companies whose market capitalization falls in the lowest 8% of the total market capitalization of the Eligible Market. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies and companies with the lowest profitability and highest relative price within the small cap universe. Profitability is defined as operating income before depreciation and amortization minus interest expense divided by book equity. Source: CRSP and Compustat. The Dimensional US Small Cap Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to March 1st, 2007. Accordingly, the results shown during the periods prior to March 1st, 2007 do not represent actual returns of the Index. Other periods selected may have different results, including losses. Back-tested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of each month of the year. The index is unmanaged however a mutual fund expense ratio has been deducted from the index returns. Investments cannot be made directly in an index. Past performance is no guarantee of future results.The calculation methodology for the Dimensional US Small Cap Index was amended on January 1st, 2014 to include profitability as a factor in selecting securities for inclusion in the index.

• DFA US Small Cap Portfolio I (DFSTX): April 1992 - Present: The U.S. Small Cap Portfolio, using a market capitalization weighted approach, purchases a broad and diverse group of readily marketable securities of U.S. small cap companies. Actual performance results assume the reinvestment of dividends and capital gains.

IFA U.S. Small Cap Value Index TIME-SERIES CONSTRUCTION • Jan 1928 - Feb 2000: Dimensional Targeted Value Index minus 0.030%/mo (net expense ratio) • Mar 2000 - Present: DFA Targeted Value Fund (DFFVX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional Target Value Index: January 1928 - December 1974: Dimensional US Targeted Value Index Composition: Represents an index of small and mid cap securities with low relative price. Small cap companies with low relative price are generally defined as companies with market capitalizations below the 1000th company in the US Market whose relative price is in the bottom 50% of the small and mid cap universe after the exclusion of utilities, companies lacking financial data, and companies with negative relative price. Mid cap companies with low relative price are generally defined as companies whose market capitalization falls below that of the 500th largest company in the Eligible Market, and whose relative price is in the in the bottom 25% of the small and mid cap universe after the exclusion of utilities, companies lacking financial data, and companies with negative relative price. The Eligible Market is composed of securities of US companies traded on the NYSE, AMEX, and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies Source: CRSP and Compustat. January 1975 - February 2000: Dimensional US Adjusted Market Value Index Composition: Represents an index of small and mid cap securities with low relative price. Small and mid cap companies with low relative price are generally defined as companies with market capitalizations below the 500th company in the US Market whose relative price is in the bottom 50% of the small and mid cap universe after the exclusion of utilities, companies lacking financial data, and companies with negative relative price. The index emphasizes companies with higher profitability. Profitability is defined as operating income before depreciation and amortization minus interest expense divided by book equity. The Eligible Market is composed of securities of US companies traded on the NYSE, AMEX, and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies Source: CRSP and Compustat. The Dimensional US Targeted Value Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to March 1st, 2007. Accordingly, the results shown during the periods prior to March 1st, 2007 do not represent actual returns of the Index. Other periods selected may have different results, including losses. Back-tested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of each month of the year. The index is unmanaged however a mutual fund expense ratio has been deducted from the index returns. Investments cannot be made directly in an index. Past performance is no guarantee of future results.The calculation methodology for the Dimensional US Targeted Value Index was amended on January 1st, 2014 to include profitability as a factor in selecting securities for inclusion in the index.

• DFA Targeted Value Portfolio I (DFFVX): March 2000 - Present: The U.S. Targeted Value Portfolio, using a market capitalization weighted approach, purchases a broad and diverse group of the readily marketable securities of U.S. small and mid cap companies that Dimensional Fund Advisors LP (the “Advisor”) determines to be value stocks. Actual performance results assume the reinvestment of dividends and capital gains.

vi V 9-9-2020 IFA | 12-Step Brochure IFA Global REIT Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Dec 1977: 50% IFA Small Cap (SC) + 50% IFA Small Value (SV) • Jan 1978 - Jan 1993: Dow Jones US Select REIT Index minus 0.020%/mo (net expense ratio) • Feb 1993 - Jun 2008: DFA Real Estate Fund (DFREX) • Jul 2008 - Present: DFA Global Real Estate Fund (DFGEX) DEFINITIONS AND OTHER IMPORTANT INFORMATION

• 50% IFA Small Cap (SC) + 50% IFA Small Value (SV): January 1928 - December 1977: For Definitions see IFA Small Cap Index (SC) and IFA Small Value Index (SV).

• Dow Jones US Select REIT Index: January 1978 - January 1993: Dow Jones Wilshire REIT Index Source: Dow Jones Wilshire Composition: U.S. publicly traded Real Estate Investment Trusts weighted by float-adjusted market capitalization. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. Currency: USD Copyright 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.

• DFA Real Estate Fund (DFREX): February 1993 - June 2008: The DFA Real Estate Securities Portfolio, using a market capitalization weighted approach, purchases readily marketable equity securities of companies whose principal activities include ownership, management, development, construction, or sale of residential, commercial or industrial real estate. The Portfolio will principally invest in equity securities of companies in certain real estate investment trusts (“REITs”) and companies engaged in residential construction and firms, except partnerships, whose principal business is to develop commercial property. Actual and back-tested performance results assume the reinvestment of dividends and capital gains.

• DFA Global Real Estate Securities Portfolio (DFGEX): July 2008 - Present: The DFA Global Real Estate Securities Portfolio seeks to achieve exposure to a broad portfolio of securities of U.S. and non-U.S. companies in the real estate industry, with a focus on real estate investment trusts (“REITs”) or companies that the Advisor considers to be REIT-like entities. Actual performance results assume the reinvestment of dividends and capital gains.

IFA International Value Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Jun 1955: IFA US Large Value Index (LV) • Jul 1955 - Dec 1974: Dimensional UK Large Value minus 0.0325%/mo (net expense ratio) • Jan 1975 - Feb 1994: Fama/French International Value minus 0.0325%/mo • Mar 1994 - Present: DFA International Value Fund (DFIVX) DEFINITIONS AND OTHER IMPORTANT INFORMATION

• IFA US Large Value Index (LV): January 1928 - June 1955: For definition see IFA US Large Value Index (LV).

• Dimensional UK Large Value Index: July 1955 - December 1974: UK Large Value Index Source: Elroy Dimson, Stefan Nagel and Garrett Quigley “Capturing the value premium in the UK”, Financial Analysts Journal 2003, 59(6): 35-45. Created Returns, converted from GBP to USD using the WM/Reuters at 4 p.m. EST (closing spot), from PFPC exchange rate Country Code EX. Actual and back-tested performance results assume the reinvestment of dividends and capital gains.

• Fama/French International Value Index: January 1975 - February 1994: Fama/French International Value Index Source: Ken French website. Simulated from MSCI and Bloomberg data. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. Currency: USD. Fama/French and multifactor data provided by Fama/French.

• DFA International Value Portfolio I (DFIVX): March 1994 - Present: The DFA International Value Series, using a market capitalization weighted approach, purchases securities of large non-U.S. companies in countries with developed markets that the Advisor determines to be value stocks. Actual performance results assume the reinvestment of dividends and capital gains.

IFA International Small Company Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Dec 1969: IFA Small Cap Index (SC) • Jan 1970 - Sep 1996: Dimensional International Small Cap Index minus 0.0433%/mo (net expense ratio) • Oct 1996 - Present: DFA International Small Company Fund (DFISX) DEFINITIONS AND OTHER IMPORTANT INFORMATION

• IFA Small Cap Index (SC): January 1928 - December 1969: For definition see IFA Small Cap Index (SC).

• Dimensional International Small Cap Index: January 1970 - June 1981: 50% Hoare Govett Small Companies Index (hgsmall.ind), 50% Nomura Small Companies Index (nomura.ind) July 1981 - December 1989: Created by Dimensional. Includes securities of MSCI EAFE countries in the bottom 10% of market capitalization, excluding the bottom 1%. All securities are market capitalization weighted. Each country is capped at 50%. Rebalanced semiannually. January 1990 - Sep 1996: Dimensional International Small Cap Index: Market-capitalization-weighted index of small company securities in the eligible markets, excluding those with the lowest profitability and highest relative price within the small cap universe. Profitability is defined as operating income before depreciation and amortization minus interest expense divided by book equity. The index monthly returns are computed as the simple average of the monthly returns of four sub-indices, each one reconstituted once a year at the end of each quarter of the year. Maximum index weight of any one company is capped at 5%. Countries currently included are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and United Kingdom. Exclusions: REITs and Investment Companies Source: Bloomberg The Dimensional International Small Cap Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to April 2008. Accordingly, the results shown during the periods prior to April 2008 do not represent actual returns of the Index. Back-tested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. The index is unmanaged however a mutual fund expense ratio has been deducted from the index returns. Investments cannot be made directly in an index. Past performance is no guarantee of future results.The calculation methodology for the Dimensional International Small Cap Index was amended in January 2014 to include profitability as a factor in selecting securities for inclusion in the index.

• DFA International Small Company Fund (DFISX)): October 1996 - Present: The International Small Company Portfolio is a “fund of funds,” which means the Portfolio generally allocates its assets among other funds managed by Dimensional Fund Advisors LP (the “Advisor”) (the “Underlying Funds”), although it has the ability to invest directly in securities and derivatives. The International Small Company Portfolio seeks to achieve its investment objective of providing investors with access to securities portfolios consisting of a broad range of equity securities of primarily small Canadian, Japanese, United Kingdom, Continental European and Asia Pacific companies. Actual performance results assume the reinvestment of dividends and capital gains.

Index Fund Advisors, Inc. vii IFA International Small Cap Value Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Dec 1969: IFA Small Cap Value (SV) • Jan 1970 - Jun 1981: IFA Int’l Small Company Index (IS) • Jul 1981 - Dec 1994: Dimensional Int’l Small Cap Value Index minus 0.0533%/mo (net expense ratio) • Jan 1995 - Present: DFA Int’l Small Cap Value Fund (DISVX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• IFA Small Cap Value (SV): January 1928 - December 1969: For definition see IFA Small Cap Value Index (SV).

• IFA International Small Company Index (IS): January 1970 - June 1981: For definition see IFA International Small Company Index (IS).

• Dimensional International Small Cap Value Index: July 1981 - December 1989: Created by Dimensional. Includes securities, of MSCI EAFE countries, in the top 30% of Book-to-Market by market capitalization conditional on the securities being in the bottom 10% of market capitalization, excluding the bottom 1%. All securities are market capitalization weighted. Each country is capped at 50%. Rebalanced semiannually. January 1990 - Dec 1994: Dimensional International Small Cap Value Index: Consists of small cap companies in eligible markets whose relative price is in the bottom 35% of their country’s respective constituents, after the exclusion of utilities and companies with either negative or missing relative price data. The index also excludes those companies with the lowest profitability within their country’s small value universe. Profitability is defined as operating income before depreciation and amortization minus interest expense divided by book equity. The index monthly returns are computed as the simple average of the monthly returns of four sub-indices, each one reconstituted once a year at the end of each quarter of the year. Maximum index weight of any one company is capped at 5%. Countries currently included are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and United Kingdom. Exclusions: REITs and Investment Companies. Source: Bloomberg. The Dimensional International Small Cap Value Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to April 2008. Accordingly, the results shown during the periods prior to April 2008 do not represent actual returns of the Index. Back-tested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and back-tested performance results assume the reinvestment of dividends and capital gains. The index is unmanaged however a mutual fund expense ratio has been deducted from the index returns. Investments cannot be made directly in an index. Past performance is no guarantee of future results.The calculation methodology for the Dimensional International Small Cap Value Index was amended in January 2014 to include profitability as a factor in selecting securities for inclusion in the index.

• DFA International Small Cap Value Portfolio I (DISVX): January 1995 - Present: The DFA International Small Cap Value Portfolio, using a market capitalization weighted approach, purchases securities of small, non-U.S. companies in countries with developed markets that Dimensional Fund Advisors LP (the “Advisor”) determines to be value stocks at the time of purchase. Actual performance results assume the reinvestment of dividends and capital gains.

IFA Emerging Market Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Dec 1969: 50% IFA US Large Value (LV) + 50% IFA US Small Cap (SC) • Jan 1970 - Dec 1988: 50% IFA International Value (IV) + 50% IFA International Small (IS) • Jan 1989 - Apr 1994: Fama/French Emerging Markets Index minus minus 0.0358%/mo (net expense ratio) • May 1994 - Present: DFA Emerging Markets Fund (DFEMX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• 50% IFA US Large Value Index (LV) + 50% IFA US Small Cap Index (SC): January 1928 - December 1969: For definitions see IFA US Large Value (LV) and IFA US Small Cap (SC).

• 50% IFA International Value (IV) + 50% IFA International Small (IS): January 1970 - December 1988: For definitions see IFA International Value Index (IV) and IFA International Small Index (IS).

• Fama/French Emerging Markets Index: January 1989 - April 1994: Fama/French Emerging Markets Simulated IndexCourtesy of Fama/French from IFC securities data. Simulated strategy of IFC investable universe countries; companies weighted by float-adjusted market cap; countries weighted by country float-adjusted market cap; rebalanced monthly. Source: “Value versus Growth: The International Evidence,” Journal of Finance 53 (1998), 1975-99. Currency: USD. Actual and backtested performance results assume the reinvestment of dividends and capital gains. Fama/French and multifactor data provided by Fama/French.

• DFA Emerging Markets Portfolio I (DFEMX): May 1994 - Present: The Emerging Markets Portfolio pursues its investment objective by investing substantially all of its assets in the Emerging Markets Series. The Emerging Markets Series purchases a broad market coverage of larger companies associated with emerging markets, which may include frontier markets (emerging market countries in an earlier stage of development), authorized for investment by the Advisor’s Investment Committee (“Approved Markets”). Actual performance results assume the reinvestment of dividends and capital gains.

IFA Emerging Market Value Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Dec 1969: IFA U.S. Small Cap Value Index (SV) • Jan 1970 - Dec 1988: IFA Emerging Markets Index (EM) • Jan 1989 - Apr 1998: Dimensional Emerging Value Index minus 0.0425%/mo (net expense ratio) • May 1998 - Present: DFA Emerging Markets Value Fund (DFEVX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• IFA U.S. Small Cap Value Index (SV): January 1928 - December 1969: For definition see IFA U.S. Small Cap Value Index (SV).

• IFA Emerging Markets Index (EM): January 1970 - December 1988: For definition see IFA Emerging Markets Index (EM).

• Dimensional Emerging Value Index: January 1989 - April 1998: Consists of companies whose relative price is in the bottom 33% of their country’s respective constituents, after the exclusion of utilities and companies with either negative or missing relative price data. The index emphasizes companies with smaller capitalization, lower relative price, and higher profitability. The index also excludes those companies with the lowest profitability and highest realtive price within their country’s small value universe. Profitability is defined as operating income before depreciation and amortization minus interest expense divided by book equity. The index monthly returns are computed as the simple average of the monthly returns of four sub-indices,

viii V 9-9-2020 IFA | 12-Step Brochure each one reconstituted once a year at the end of each quarter of the year. Maximum index weight of any one company is capped at 5%. Countries currently included are Brazil, Chile, China, Colombia, Czech Republic, Hungary, India, Indonesia, Malaysia, Mexico, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand, and Turkey. Exclusions: REITs and Investment Companies. Actual and backtested performance results assume the reinvestment of dividends and capital gains. Source: Bloomberg.

• DFA Emerging Markets Value Portfolio I (DFEVX): May 1998 - Present: The Emerging Markets Value Portfolio pursues its investment objective by investing substantially all of its assets in the Emerging Markets Value Fund. The Emerging Markets Value Fund purchases emerging market equity securities that are deemed by the Advisor to be value stocks at the time of purchase and associated with emerging markets, which may include frontier markets (emerging market countries in an earlier stage of development), authorized for investment by the Advisor’s Investment Committee (“Approved Markets”). Actual performance results assume the reinvestment of dividends and capital gains.

IFA Emerging Market Small Cap Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Dec 1969: IFA U.S. Small Cap Index (SC) • Jan 1970 - Dec 1988: IFA Emerging Markets Index (EM) • Jan 1989 - Mar 1998: Fama/French Emerging Markets Small minus 0.0558%/mo (net expense ratio) • Apr 1998 - Present: DFA Emerging Markets Small Fund (DEMSX) DEFINITIONS AND OTHER IMPORTANT INFORMATION

• IFA U.S. Small Cap Index (SC): January 1928 - December 1969: For definition see IFA U.S. Small Cap Index (SC).

• IFA Emerging Markets Index (EM): January 1970 - December 1988: For definition see IFA Emerging Markets Index (EM)

• Fama/French Emerging Markets Small Index: January 1989– March 1998: Provided by Fama/French. Actual and backtested performance results assume the reinvestment of dividends and capital gains. Fama/French and multifactor data provided by Fama/French.

• DFA Emerging Markets Small Cap Portfolio I (DEMSX): April 1998 - Present: The Emerging Markets Small Cap Portfolio pursues its investment objective by investing substantially all of its assets in the Emerging Markets Small Cap Series. The Emerging Markets Small Cap Series purchases a broad market coverage of smaller companies associated with each emerging market, which may include frontier markets (emerging market countries in an earlier stage of development), authorized for investment by the Advisor’s Investment Committee (“Approved Markets”). Actual performance results assume the reinvestment of dividends and capital gains.

IFA One-Year Fixed Income Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Jun 1963: One-Month T-Bills minus 0.0142%/mo (net expense ratio) • Jul 1963 - Jul 1983: ICE BofAML 1-Year US Treasury Note Index minus 0.0142%/mo (net expense ratio) • Aug 1983 - Present: DFA U.S. One Year Fixed Income Fund (DFIHX) DEFINITIONS AND OTHER IMPORTANT INFORMATION

• One-Month T-Bills Index: January 1928 - June 1963: One-Month US Treasury Bills. Actual and back-tested performance results assume the reinvestment of earnings. Source: Morningstar Former Source: Stocks, Bonds, Bills, And Inflation, Chicago: Ibbotson And Sinquefield, 1986. Currency: USD. Mutual fund universe statistical data and non-Dimensional money managers’ fund data provided by Morningstar, Inc.

• ICE BofAML 1-Year US Treasury Note Index: July 1963 - July 1983: Actual and back-tested performance results assume the reinvestment of earnings. CRSP/DFA. Total Returns in USD. Source: ICE Data Indices, LLC GC03 Index. Currency: USD. ICE BofAML index data copyright 2018 ICE Data Indices, LLC.

• DFA One-Year Fixed Income Portfolio (DFIHX): August 1983 - Present: The One-Year Portfolio seeks to achieve its investment objective by generally investing in a universe of high quality fixed income securities that typically mature in one year or less. The Portfolio may, however, take a large position in securities maturing within two years of the date of settlement when higher yields are available. The One-Year Portfolio invests in U.S. government obligations, U.S. government agency obligations, dollardenominated obligations of foreign issuers issued in the U.S., securities of domestic or foreign issuers denominated in U.S. dollars but not trading in the U.S., foreign government and agency obligations, bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate obligations, commercial paper, repurchase agreements and obligations of supranational organizations. Actual performance results assume the reinvestment of earnings.

IFA Two-Year Global Fixed Income Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Jun 1977: Five-Year T-Notes minus 0.0142%/mo (net expense ratio) • Jul 1977 - Dec 1989: ICE BofAml US Treasury Index 1-3 Year minus 0.0142%/mo • Jan 1990 - Feb 1996: FTSE World Government Bond Index 1-3 Years (hedged to USD) minus 0.0142%/mo • Mar 1996 - Present: DFA 2-Year Global Fixed Income Fund (DFGFX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Five-Year T-Notes Index: January 1928 - June 1977: Five-Year US Treasury Notes. Actual and back-tested performance results assume the reinvestment of earnings. Source: Morningstar. Former Source: Ibbotson Intermediate. Five Year Treasury Notes. Currency: USDMutual fund universe statistical data and non-Dimensional money managers’ fund data provided by Morningstar, Inc.

• ICE BofAml US Treasury Index 1-3 Year: July 1977 - December 1989: ICE BofAML 1-3 Year US Treasury Index. July 1977 - October 2017: BofA Merrill Lynch US Treasury Index 1-3 Years. Actual and back-tested performance results assume the reinvestment of earnings. Total Returns in USD. Source: ICE Data Indices, LLC G1O2 Index. Currency: USD. ICE BofA. ML index data copyright 2018 ICE Data Indices, LLC.

• FTSE World Government Bond Index 1-3 Years (hedged to USD): January 1990 - February 1996: FTSE World Government Bond Index 1-3 Years (hedged to USD) Total Returns Hedged to USD. Actual and back-tested performance results assume the reinvestment of earnings. Source: FTSE. Currency: USD. Citi fixed income indices copyright 2018 by Citigroup.

• DFA Two-Year Global Fixed Income Portfolio (DFGFX): March 1996 - Present: The Two-Year Portfolio seeks to maximize risk-adjusted total returns from a universe of high quality, U.S. issued, dollar-denominated fixed income securities with maturities of no more than two years. The Two-Year Portfolio may invest in U.S. government obligations, U.S. government agency obligations, dollar-denominated obligations of foreign issuers issued in the U.S., bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate obligations, commercial paper, repurchase agreements and obligations of supranational organizations. Actual performance results assume the reinvestment of earnings.

Index Fund Advisors, Inc. ix IFA Short Term Government Index

TIME-SERIES CONSTRUCTION • Jan 1928- Dec 1972: Five Year T-notes minus 0.0158%/mo (net expense ratio) • Jan 1973 - Jun 1987: Bloomberg Barclays U.S. Government Bond Index Intermediate minus 0.0158%/mo • Jul 1987 - Present: DFA Short-Term Government Portfolio (DFFGX) DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Five-Year T-Notes Index: January 1928 - December 1972: Five-Year US Treasury Notes. Actual and back-tested performance results assume the reinvestment of earnings. Source: Morningstar. Former Source: Ibbotson Intermediate. Five Year Treasury Notes. Currency: USD. Mutual fund universe statistical data and non-Dimensional money managers’ fund data provided by Morningstar, Inc.

• Bloomberg Barclays U.S. Government Bond Index Intermediate: January 1973 - June 1987: Bloomberg Barclays U.S. Government Bond Index Intermediate. November 2008 - August 2016: Barclays U.S. Government Bond Index Intermediate January 1973 - October 2008: Lehman Intermediate Government Bond Index Intermediate. Total Returns in USD. Maturity: 1-10 Years. Actual and back-tested performance results assume the reinvestment of earnings. Source: Bloomberg. Currency: USD. Bloomberg Barclays data provided by Bloomberg Finance L.P.

• DFA Short-Term Government Portfolio (DFFGX): July 1987 - Present: The Short-Term Government Portfolio seeks to maximize risk-adjusted total returns from a universe of obligations of the U.S. Government and its agencies maturing in five years or less. The credit quality of the securities purchased by the Portfolio will be that of the U.S. Government or its agencies. Actual performance results assume the reinvestment of earnings.

IFA Five-Year Global Fixed Income Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Nov 1990: IFA Short Term Government Index (3G) • Dec 1990 - Present: DFA Five-Year Global Fixed Income Fund (DFGBX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• IFA Short Term Government Index (3G): January 1928 - November 1990: For definition see IFA Short Term Government Index (3G).Actual and back-tested performance results assume the reinvestment of earnings.

• DFA Five-Year Global Fixed Income Portfolio (DFGBX): December 1990 - Present: The Five-Year Global Portfolio seeks to achieve its investment objective by generally investing in a universe of U.S. and foreign debt securities maturing in five years or less. The Five-Year Global Portfolio primarily invests in obligations issued or guaranteed by the U.S. and foreign governments, their agencies and instrumentalities, corporate debt obligations, bank obligations, commercial paper, repurchase agreements, obligations of other domestic and foreign issuers, securities of domestic or foreign issuers denominated in U.S. dollars but not trading in the United States, and obligations of supranational organizations. Actual performance results assume the reinvestment of earnings.

IFA SP 500 Index

TIME-SERIES CONSTRUCTION Jan 1928 - Sep 1999: Dimensional US Large Cap Index Minus 0.00167%/mo (net expense ratio) Oct 1999 - Jun 2017: DFA U.S. Large Company Fund (DFUSX) Jul 2017 - Present: Schwab S&P 500 Index (SWPPX) DEFINITIONS AND OTHER IMPORTANT INFORMATION

IFA NSDQ Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Jan 1973: Fama/French US Small Growth Simulated Portfolio (ex Utilities) • Feb 1973 - Sep 2003: NASDAQ Composite Index • Oct 2003 - Present: Nasdaq Composite Total Return (XCMP) (Source: Morningstar)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French US Small Growth Simulated Portfolio (ex Utilities): January 1928 - January 1973: Composition: US operating companies trading on the NYSE, AMEX or Nasdaq

x V 9-9-2020 IFA | 12-Step Brochure NMS. Maximum weight of any security in a portfolio is 4%. Exclusions: ADRs, Investment Companies, Tracking Stocks before 1993, non-US incorporated companies, Closed-end funds, Certificates, Shares of Beneficial Interests, Berkshire Hathaway Inc (Permco 540), negative book values, and Utilities. Sources: CRSP databases for returns and market capitalization: 1926 - present. Compustat and hand-collected book values: 1926 - 1992.CRSP links to Compustat and hand-collected links: 1926 - present. Book-to-market ratios provided by Dimensional: 1993 - present. Breakpoints: Before June 1996, the small portfolios contain firms with market capitalization below the 55th percentile of all eligible NYSE firms and the large portfolios contain firms with market caps above the 50th percentile. From June 1996 to December 2000, the size breakpoint for all portfolios is the market cap of the median eligible NYSE firm. The BtM breakpoints for 1926 to 2000 split the eligible NYSE firms with positive book equity into three categories: the top 30% are in value and the bottom 30% are in growth. Starting in January 2001, the size breakpoints are defined by cumulative market cap percentile rules. Small is the bottom 8% of the overall stock market and large is the top 90%. The BtM breakpoints are defined by the firms in the relevant size range. The breakpoints for small value (high BtM) and small growth (low BtM) assign 25% of the total market cap in the small size range to each portfolio. The BtM breakpoints for large assign 10% of the market equity of large firms to the large value portfolio and 20% to the large growth portfolio. Rebalancing: Annual (at the end of June): 1926 - 1992. Quarterly: 1993 - Present. Currency: USDFama/French and multifactor data provided by Fama/French.

• NASDAQ Composite Index: February 1973 - September 2003: The Nasdaq Composite Index is the market capitalization-weighted index of common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests.

• Nasdaq Composite Total Return (XCMP): Oct 2003 - Present: The Nasdaq Composite Index is the market capitalization-weighted index of common equities listed on the Nasdaq stock exchange. The types of securities in the index include American depositary receipts, common stocks, real estate investment trusts (REITs) and tracking stocks, as well as limited partnership interests.

IFA U.S. Total Market Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Apr 1992: Dimensional US Market Index minus 0.0029%/mo (net expense ratio) • May 1992 - Present: Vanguard US Total Market Index Inst’l (VITSX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional US Market Index: January 1928 - April 1992: Dimensional US Market Index Composition: Market-capitalization-weighted index of securities of all US companies. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies Source: CRSP and Compustat The Dimensional US Market Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to March 1st, 2007. Accordingly, the results shown during the periods prior to March 1st, 2007 do not represent actual returns of the Index. Other periods selected may have different results, including losses. Backtested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and backtested performance results assume the reinvestment of dividends and capital gains. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of each month of the year. The Index is unmanaged and is not subject to fees and expenses typically associated with managed accounts or investment funds. Investments cannot be made directly in an index. Past performance is no guarantee of future results.

• Vanguard US Total Market Index (VITSX): May 1992 - Present: The investment seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The fund employs a passive management strategy designed to track the performance of the MSCI US Broad Market index, which consists of all the U.S. common stocks traded regularly on the New York Stock Exchange and the Nasdaq over-the-counter market. It typically holds 1,200-1,300 of the stocks in its target index. Actual performance results assume the reinvestment of dividends and capital gains.

IFA U.S. Large Growth Index

TIME-SERIES CONSTRUCTION • Jan 1928 - Dec 1974: Dimensional US Large Cap High Price-to-Book Index minus 0.0033%/mo (net expense ratio) • Jan 1975 - Nov 1992: Dimensional US Large Growth Index minus 0.0033%/mo • Dec 1992 - Present: Vanguard Growth Index Inst’l (VIGIX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional US Large Cap High Price-to-Book Index: January 1928 - December 1974: Dimensional US Large Cap High Price-to-Book Index Composition: A subset of the US Large Cap Index. The subset is defined as companies whose relative price is in the top 20% of the US Large Cap Index after the exclusion of utilities, companies lacking financial data, and companies with negative relative price. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies Source: CRSP and Compustat. Prior to February 2013 the name of this returns series was Dimensional US Large Cap Growth Index.The Dimensional US Large Cap High Price-to-Book Index has been hypothetically back- tested by Dimensional Fund Advisors and did not exist prior to March 1st, 2007. Accordingly, the results shown during the periods prior to March 1st, 2007 do not represent actual returns of the Index. Other periods selected may have different results, including losses. Backtested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and backtested performance results assume the reinvestment of dividends and capital gains. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of each month of the year. The index is unmanaged however a mutual fund expense ratio has been deducted from the index returns. Investments cannot be made directly in an index. Past performance is no guarantee of future results.

• Dimensional US Large Growth Index: January 1975 - November 1992: Dimensional US Large Cap Growth Index Composition: Consists of companies with market capitalizations above the 1000th name whose relative price is in the top 50% of the all large cap companies after the exclusion of utilities, companies lacking financial data, and companies with negative relative price. The Index emphasizes companies with higher profitability, lower relative price, and lower market capitalization. Profitability is defined as operating income before depreciation and amortization minus interest expense divided by book equity. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and Investment Companies Source: CRSP and Compustat The Dimensional US Large Cap Growth Index has been hypothetically back-tested by Dimensional Fund Advisors and did not exist prior to December 31st, 2012. Accordingly, the results shown during the periods prior to December 31st, 2012 do not represent actual returns of the Index. Other periods selected may have different results, including losses. Backtested index performance is hypothetical and is provided for informational purposes only to indicate historical performance had the index been calculated over the relevant time periods. Actual and backtested performance results assume the reinvestment of dividends and capital gains. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of each month of the year. The Index is unmanaged and is not subject to fees and expenses typically associated with managed accounts or investment funds. Investments cannot be made directly in an index. Past performance is no guarantee of future results.

• Vanguard Growth Index (VIGIX): December 1992 - Present: The investment seeks to track the performance of a benchmark index that measures the investment return of large-capitalization growth stocks. The fund employs a passive management investment approach designed to track the performance of the MSCI US Prime Market Growth index, a broadly diversified index of growth stocks of large U.S. companies. It attempts to replicate the target index by investing all, or substantially all, of assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. Actual performance results assume the reinvestment of dividends and capital gains.

Index Fund Advisors, Inc. xi IFA U.S. Small Growth Index

TIME-SERIES CONSTRUCTION • Jan 1928 - May 1998: Fama/French Small Growth Research Index minus 0.005%/mo (net expense ratio) • Jun 1998 - Present: Vanguard Small-Cap Growth Index Inst’l (VSGIX)

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French Small Growth Research Index: January 1928 - May 1998: Composition: The index portfolios for July of any given year to June of the following year include all NYSE, AMEX, and NASDAQ stocks for which we have market equity for December of the prior year and June of the given year, and (positive) book-to-market equity data for fiscal year ending in the prior year. Exclusions: ADRs, Investment Companies, Tracking Stocks, non-US incorporated companies, Closed-end funds, Certificates, Shares of Beneficial Interests, and negative book values. Sources: CRSP databases for returns and market capitalization: 1926 - present. Compustat and hand-collected book values: 1926 - present. CRSP links to Compustat and hand-collected links: 1926 - present. Breakpoints:”The size breakpoint is the market capitalization of the median NYSE firm, so the big and small categories contain the same number of eligible NYSE firms. The BtM breakpoints split the eligible NYSE firms with positive book equity into three categories: 30% of the eligible NYSE firms with positive BE are in Low (Growth), 40% are in Medium (Neutral), and 30% are in High (Value)” Rebalancing: Annual (at the end of June) 1926-Present. Actual and backtested performance results assume the reinvestment of dividends and capital gains. Currency: USD Fama/French and multifactor data provided by Fama/French.

• Vanguard Small-Cap Growth Index (VSGIX): June 1998 - Present: The investment seeks to track the performance of a benchmark index that measures the investment return of small capitalization growth stocks. The fund employs a passive management investment approach designed to track the performance of the MSCI US Small Cap Growth index, a broadly diversified index of growth stocks of smaller U.S. companies. It attempts to replicate the target index by investing all, or substantially all, of assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. Actual performance results assume the reinvestment of dividends and capital gains.

DFA SC Dimensional US Small Cap Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional US Small Cap Index: was created by Dimensional in March 2007 and is compiled by Dimensional. It represents a market-capitalization-weighted index of securities of the smallest US companies whose market capitalization falls in the lowest 8% of the total market capitalization of the Eligible Market. The Eligible Market is composed of securities of US companies traded on the NYSE, NYSE MKT (formerly AMEX), and Nasdaq Global Market. Exclusions: Non-US companies, REITs, UITs, and investment companies. From January 1975 to the present, the index also excludes companies with the lowest profitability and highest relative price within the small cap universe. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Source: CRSP and Compustat. The index monthly returns are computed as the simple average of the monthly returns of 12 sub-indices, each one reconstituted once a year at the end of a different month of the year. The calculation methodology for the Dimensional US Small Cap Index was amended on January 1, 2014, to include profitability as a factor in selecting securities for inclusion in the index. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

DFA HP Dimensional US High Profitability Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional US High Profitability Index: was created by Dimensional in January 2014 and represents an index consisting of US companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three high- profitability subgroups. It is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Source: CRSP and Compustat. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

DFA LP Dimensional US Low Profitability Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional US Low Profitability Index: was created by Dimensional in January 2014 and represents an index consisting of US companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three low- profitability subgroups. It is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Source: CRSP and Compustat. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

DFA ISC Dimensional International Small Cap Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional International Small Cap Index: was created by Dimensional in April 2008 and is compiled by Dimensional. July 1981–December 1993: It Includes non-US developed securities in the bottom 10% of market capitalization in each eligible country. All securities are market capitalization weighted. Each country is capped at 50%. Rebalanced semiannually. January 1994–Present: Market-capitalization-weighted index of small company securities in the eligible markets excluding those with the lowest profitability and highest relative price within the small cap universe. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. The index monthly returns are computed as the simple average of the monthly returns of four sub-indices, each one reconstituted once a year at the end of a different quarter of the year. Prior to July 1981, the index is 50% UK and 50% Japan. The calculation methodology for the Dimensional International Small Cap Index was amended on January 1, 2014, to include profitability as a factor in selecting securities for inclusion in the index. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

DFA ILC Dimensional International Low Profitability Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional International Low Profitability Index: was created by Dimensional in January 2013 and represents an index consisting of non-US developed companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization of each eligible country. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three low-profitability subgroups. The index is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Source: Bloomberg. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

xii V 9-9-2020 IFA | 12-Step Brochure DFA IHC Dimensional International High Profitability Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional International High Profitability Index : was created by Dimensional in January 2013 and represents an index consisting of non-US developed companies. It is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization of each eligible country. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three high-profitability subgroups. The index is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Source: Bloomberg. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

DFA EMHP Dimensional Emerging Markets High Profitability Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional Emerging Markets High Profitability Index: was created by Dimensional in April 2013 and represents an index consisting of emerging markets companies and is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization of each eligible country. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three high-profitability subgroups. The index is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Source: Bloomberg. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

DFA EMLP Dimensional Emerging Markets Low Profitability Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional Emerging Markets Low Profitability Index: was created by Dimensional in April 2013 and represents an index consisting of emerging markets companies and is compiled by Dimensional. Dimensional sorts stocks into three profitability groups from high to low. Each group represents one-third of the market capitalization of each eligible country. Similarly, stocks are sorted into three relative price groups. The intersections of the three profitability groups and the three relative price groups yield nine subgroups formed on profitability and relative price. The index represents the average return of the three low-profitability subgroups. The index is rebalanced twice per year. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. Source: Bloomberg. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

DFA EMSC Dimensional Emerging Markets Small Cap Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Dimensional Emerging Markets Small Cap Index: was created by Dimensional in April 2008 and is compiled by Dimensional. January 1989–December 1993: Fama/French Emerging Markets Small Cap Index. January 1994–Present: Dimensional Emerging Markets Small Index Composition: Market-capitalization-weighted index of small company securities in the eligible markets excluding those with the lowest profitability and highest relative price within the small cap universe. Profitability is measured as operating income before depreciation and amortization minus interest expense scaled by book. The index monthly returns are computed as the simple average of the monthly returns of four sub-indices, each one reconstituted once a year at the end of a different quarter of the year. Source: Bloomberg. The calculation methodology for the Dimensional Emerging Markets Small Cap Index was amended on January 1, 2014, to include profitability as a factor in selecting securities for inclusion in the index. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

F/F TM Fama/French Total US Market Research Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French Total US Market Research Index: July 1926–Present: Fama/French Total US Market Research Factor + One-Month US Treasury Bills. Source: Ken French Website. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

F/F V Fama/French US Value Research Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French US Value Research Index: Provided by Fama/French from CRSP securities data. Includes the lower 30% in price-to-book of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973). Actual and backtested performance results assume the reinvestment of dividends and capital gains.

F/F G Fama/French US Growth Research Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French US Growth Research Index: Provided by Fama/French from CRSP securities data. Includes the higher 30% in price-to-book of NYSE securities (plus NYSE Amex equivalents since July 1962 and Nasdaq equivalents since 1973). Actual and backtested performance results assume the reinvestment of dividends and capital gains.

F/F IV Fama/French International Value Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French International Value Index: 2008–present: Provided by Fama/French from Bloomberg securities data. Simulated strategy of MSCI EAFE + Canada countries in the lower 30% price- to-book range. 1975–2007: Provided by Fama/French from MSCI securities data. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

Index Fund Advisors, Inc. xiii F/F IG Fama/French International Growth Index DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French International Growth Index: 2008–present: Provided by Fama/French from Bloomberg securities data. Simulated strategy of MSCI EAFE + Canada countries in the higher 30% price-to-book range. 1975–2007: Provided by Fama/French from MSCI securities data. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

F/F EMV Fama/French Emerging Markets Value Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French Emerging Markets Value Index: 2009–present: Provided by Fama/French from Bloomberg securities data. Simulated strategy using IFC investable universe countries. Companies in the lower 30% price-to-book range; companies weighted by float-adjusted market cap; countries weighted by country float-adjusted market cap; rebalanced monthly. 1989– 2008: Provided by Fama/French from IFC securities data. IFC data provided by International Finance Corporation. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

F/F EMG Fama/French Emerging Markets Growth Index

DEFINITIONS AND OTHER IMPORTANT INFORMATION

• Fama/French Emerging Markets Growth Index: 2009–present: Provided by Fama/French from Bloomberg securities data. Simulated strategy using IFC investable universe countries. Companies in the higher 30% price-to-book range; companies weighted by float-adjusted market cap; countries weighted by country float-adjusted market cap; rebalanced monthly. 1989–2008: Provided by Fama/French from IFC securities data. IFC data provided by International Finance Corporation. Actual and backtested performance results assume the reinvestment of dividends and capital gains.

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2018

The Investing Kit includes Mark Hebner’s highly-acclaimed book, Index Funds: The 12-Step Recovery Program for Active Investors, and a companion DVD of the documentary film of the same name based on the book. It also includes the Galton Board - Stock Market Edition, a device that demonstrates the similarities between the bell curve, cascading beads, and the stock market. The kit provides investors with a comprehensive education of how markets work, with each piece providing an integral component to deliver a multimedia demonstration of the futility of speculating in the stock market and the wisdom of buying, holding and rebalancing a risk-appropriate portfolio of index funds.

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Available at The Investing Kit is available on amazon.com, get yours today!

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The IFA App is an educational resource for investors that is available for both Apple iOS and Android devices. Gain access to hundreds of articles and videos on evidence-based strategies, including investing advice videos from Nobel Laureates such as Eugene Fama and Harry Markowitz.

The IFA App makes it easy to: • Login to your IFA Account to view and download your monthly performance reports. On Apple iOS only. • Access IFA Index Portfolio historical risk and return data • Read and share evidence based investing articles and videos • Gain access to the documentary film Index Funds: The 12 Step Recovery Program for Active Investors • Setup an account with IFA • Contact IFA’s wealth advisors via phone, email or Facetime • Available on both the Apple App Store and Google Play Store for Android.

Corporate Office Index Fund Advisors, Inc. Tel: (888) 643-3133 19200 Von Karman Ave. Local: (949) 502-0050 Suite 150 Fax: (949) 502-0048 Irvine, CA 92612-8502 www.ifa.com Index Fund Advisors, Inc. xvii